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SHAH COMMISSION OF INQUIRY

(Appointed under Section 3 of the Commissions of Inquiry Act, 1952)

INTERIM REPORT I

March 11, 1978

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SHAH COMMISSION OF INQUIRY

(Appointed under Section 3 of the Commissions of Inquiry Act, 1952)

INTERIM REPORT I

March 11, 1978

CONTENTS .

Chapter I

Chapter If

Chapter III

Chapter IV

Chapter V

Chapter VI

Chapter VII

■■ 3.

Pages

Notification appointing a Commission of, Inquiry and the staff sanctioned, and Categorisation of Complaints 1—3

Important enactments and amendments of the Constitution .' . 4 — 6

Procedure followed by the Commission explained 7 — 15

Scheme of the Report • . 16

Circumstances leading to the declaration of Emergency on June 25, 1975 17—32

The working of the media of information under the I & B Ministry during the Emergency . . . 33 — 48
Specific cases :

The case regarding the reversion of Shri Justice R. N. Aggarwal of Delhi High Court .... 49 — 51

Refusal by Smt. Indira Gandhi to extend the term of Shri Justice U. R. Lalit of the Bombay High Court . 51 — 52

Deviation from established procedure and irregularities in the appointment of Shri K.R. Puri as Governor

of Reserve Bank of India ■ . 52—54

Subversion of lawful processes and well-established conventions in the appointment of Shri T. R. Vardachary

as Chairman of the State Bank of India 54—57

Deviation from established procedure and irregularities in the appointment of Shri T. R. Tuli as Chairman and

Managing Director of the Punjab National Bank 57 — 58

Deviation from established procedure In public sector undertaking in the case of Lt. Genl. Satarawala's

appointment as Chairman-eHHi-Managing Director of I.T.D.C. ......... 59

7. Deviation from established procedure in the appointment of Air Marshal H, C. Dewan as Chairman,

International Airports Authority of India ..,.-...,.... 59

S. Misuse of powers and institution of false criminal complaints against four senior officials by the CBI at the

instance of Smt. Indira Gandhi 59—64

9. Uniawful detention of Textile/Customs employees under MISA by Delhi Administration and institution of

false CBI cases against four of them . 64 — 67

.■ 10. Misuse of powers and miscarriage of justice in the case of Shri Sudarshan Kumar Verma by the CBI officials 68 — 69

! 1 1 . Deviation from established procedure by Shri T. R . Tuli, Chairman of the Punjab National Bank in allowing

a clean overdraft to M/s Associated Journals Limited .,..,..., 69 — 71

12. Deviation from established procedure in sanctioning facility by way of opening three foreign letters of credit

by the Punjab National Bank in favour of M/s ICRS MA Chemicals Pvt. Ltd, . . . 72—73

13. Concessions by Punjab National Bank in favoujiiif Maruti Limited ....... 73 — 74

T4. Deviation from established procedure in the rcconstitution of the Boards of Air India and Indian Airlines

Corporations . . . . . . . . . • - . ..... 74—75

15. Decision processes leading to the purchase of 3 Hoeing 737 Aircraft by Indian Airlines .... 75—78

!6. Detention of Smt. Gayatri Devi and Lt, Col. Bhawani Singn under COFEPOSA Act, 1974 . . 78—82

.17. Detention of Shri Bliini Sen Suchar and seven others , . , ... . . . 82 — 86

IS, Improprieties committed in regard to Shri Manga! Behari. IAS of Rajasthan cadre and termination of

the services or Smt. Ciuindrawati Sharma, Axstt. Teacher ......... 86 — 93

I 1 ). Search and seizure opera linns under (lie Income Tax At I of Iw-.i Trade Union leaders .... 93 •)•!

CHAPTER J

In exercise of the powers under Section 3 of the
Commissions of Inquiry Act, 1952, the Central
Government published on May 28, 1977, a notification
appointing a Commission of Inquiry.

1 .2 The notification reads as follows :

"MINISTRY OF HOME AFFAIRS
NOTIFICATION

New Delhi, the 28/A May, \911

SO. 374(E). — Whereas there is a widespread
demand from different sections of the public
for . an inquiry into several aspects of
allegations of abuse oi authority, excesses
and malpractices committed and action
taken or purported to be taken in the wake
of the Emergency proclaimed on the
25th June, 1975 under Article 352. of the
Constitution;

And whereas the Central Government
is of the opinion that it is necessary to
appoint a Commission of Inquiry for the
purpose of making: jnquiry into a definite
matter . of public importance, that is,
excesses, malpractices aiid misdeeds during
the Emergency or in the days immediately
preceding the said proclamation, by the
political authorities, public servants, their
I ' ,- friends and/or relatives and in particular
I allegations of gross misuse of powers of

arrest or detention, maltreatment, of and
atrocities on detenus and other prisoners
arrested under DISiR, compulsion and use
of force in the implementation of the family
planning programme and indiscriminate and
high-handdd demolition of houses, huts,
shops, buildings, structures and destruction
of property in the name of slum clearance
or enforcement of town planning or land
use schemes in the cities and towns resulting,
inter alia, in large number of people
becoming homeless or having to move far
away from the places of their vocation.

Now, therefore, in exercise of the
powers conferred by Section 3 of the
Commissions of Inquiry Act, 19.52 (60 of
1952) the Central Government hereby

, appoints a Commission of Inquiry consisting

I of ..the following, namely,

Chairman — Shir J. C. Shah, Retired Chief
Justice of the Supreme Court
of India.

2. The terms of reference of the Commission shall
be as follows :

(a) to inquire into the facts and circumstances
relating to specific instances of —

(i) subversion of lawful processes and well-
established conventions, administrative
procedures and practices, abuse of
authority, misuse of powers, excesses
and/or malpractices committed during
the period when the Proclamation of
Emergency made on 25th June, 1975
under Article 352 of the Constitution was
in force or in days immediately preceding
the said Proclamation,

(iij misuse of powers of arrests or issue of

detention orders where such arrests or

orders are alleged to have been made on

3 considerations not germane to the pur-

, poses of the relevant Acts during the

aforesaid period,

(hi) specific instances of maltreatment of and/

. or atrocities on persons arrested under

DISIR or detained and their relatives and

close associates during the aforesaid

period,

(iv) specific instances of compulsion and use

of force in the implementation of the

family planning programme during the
aforesaid period,

(v) indiscriminate, high-handed or unautho-
rised demolition of houses, huts, shops,
buildings, structures and destruction 'Of
property in the name of slum clearance
or enforcement of Town Planning or land
use schemes, during the aforesaid period,

Provided that the inquiry shall be in
regard to acts of such abuse of authority,
misuse of powers, excesses, malpractices
etc. alleged to have been committed by
public servants, and

Provided further that the inquiry shall
also cover the conduct of other individuals
who may have directed, instigated or
sided or abetted or otherwise associated
themselves with the commission of such
acts by public servants;

(b) to consider such other matters which, in
the opinion of the Commission, have any
relevance 'to the aforesaid allegations; and

(c) to recommend measures' which may be
adopted for preventing the recurrence of
such abuse of authority, misuse of powers,
excesses and malpractices.

3, The inquiry by the Commission shall be in
regard to —

(i) complaints or allegalions aforesaid that may
be made before the Commission by any
individual or association in such form and
accompanied by such affidavits as may be
prescribed by the Commission, and

(ii) such instances rclatable to paragraph 2(a)(i)
to (v) as may be brought to its notice
by the Central Government- or a State
Government or an Union Territory for
inquiry.

4. The Commission shall make interim reports to
the Central Government on the conclusion of inquiry
into any particular allegation or series of allegations
and will be expected to complete its inquiry jand
submit its final report to the Central Government on
or before 31st December, 1977.

5. The Central Government is of opinion that
having regard to the nature of the inquiry to be made
and other circumstances of the case, all the provisions
of sub-section (2), sub-section (3), sub-section (4),
and sub-section (5) of Section 5 of the Commissions
of Inquiry Act, 1952 (60 of 1952), should be made
applicable to the said Commission and the Central
Government hereby directs under sub-section (1) of
the said Section 5 that all the provisions aforesaid shall
apply to the said Commission.

[No, II/16011/32/77-S&P(D.lI)]
T. C. A. SRINIVASAVARDAN, Secy."

.1.3 Subsequently, the Central Government issued
the following notification extending . the time for the
completion of the Inquiry to June 30, 1978 :

"MINISTRY OF HOME AFFAIRS
NOTIFICATION

New Delhi, the 16th December, 1977

S.O. 544(E). — In exercise of the powers
conferred by Section 3 of the Commission
of Inquiry Act, 1952 (60 of 1952), the
Central Government hereby makes the
following amendment in the Notification of
the Government of India in the Ministry of
Home Affairs No. S.O. 374(E), dated
28th May, 1977, (relating to the Commission
of Inquiry on excesses during emergency)
namely :—

la para 4 of the said Notification for the words
and figures "on or before 31st December,
1977" the words and figures "on or
before 30th June, 1978" shall be
substituted.

[No. 11/1801 l/32/77-S&P(D.IIj Comsec]
MAHESHWAR PRASAD, Addl. Secy."

1.4 The Commission issued notices under rule
5(2) (b) of the Commissions of Inquiry Rules,
Pursuant [hereto, 48,500 complaints were received in
the office of Ihe Commission.

1,5 The Government of India made Ihe services of
the following officers and staff available to the
Commission for investigation of the various complaints
and other cases which came for scrutiny before the
Commission : —

SI. Designation
No.

Numbers Numbers
Sanctioned presently
working

CD (2)

(3)

(4)

1. Secretary

2. Joint Secretary

—

3. I.G.P. .

4, Director & equivalent

5. AddU.G. .

, ■ , ]

(Post
conver-
ted into
aD.r.G.
who has
taken
over) ,

6. Commissioner

".'• 1

7. Under Secretary Class I senior scale

equivalent-A.O.— S.A. to Chairman 42

8. Junior Scale Officer/O.S.D. . 66

9. Accounts Officer .

. 1

10, Section Officers

11. P. S. to Secretary

12. Court Master

'■1'

13. Steno Grade 'B'

14. Inspectors

. - 38

15. Steno Grade 'C

16. Assistants

17, Sub-Inspectors

. - . 51

18. Hindi Translator

—

19. Steno Grade 'D'

20. U.D.C.

21 . Junior Reception Officer

—

22. L.D.C.

23. Staff Car Driver .

24. Motor Cycie Driver

2 ,

25. Gestetner Operator

26, Constables .

27. Peons .

28. Daftri

29. Jamedar

30. Farash .

31. Sweepers

32. Contingency paid st

art '.

1
. . 9
1
1 •

. . 2

1 Peon &
55 Con-
tingency'

i paid

r staff
making .
a total of
56*.

♦includes 3 persons taken against vacant posts of Constables.

1.6 In a number of cases the records of the
Government of India were called for by the
Commission and investigations were directed by the
Commission in regard to the matters appearing before
it within any of .the five heads of the Terms of
Reference.

1.7 The Commission fixed July 31, 1977, as the
last date for filing complaints. The Commission did
not entertain any complaints received thereafter. The
complaints received by the Commission were
categorised as under :

(I) Complaints which do not fall within the
purview of the terms of reference of the

Commission— to be filed and complainants

informed accordingly.

(II) Complaints which do not fall within the
purview of the terms of reference of the
: Commission but contain serious allegations —
to be referred to ths Central/State
Governments for inquiry and appropriate
action.

(III) Complaints falling within ihe terms of
reference of the Commission but' not
serious enough to warrant inquiry by the
Commission itself— to be referred to the
Central/State Governments with a request

■ ■ to have them looked into at an appropriate
level and action as deemed fit taken there-
on under intimation to the complainants.

(IV) Complaints falling within the purview . of
the terras of reference of the Commission
which are serious enough but cannot be

."■'•. handled by the Commission's staff itself —
. to. be referred to the Central/State Govern-
ments for an inquiry by a committee/
authority appointed under section 11 of
Commissions of Inquiry Act, 1952, and the
findings and recommendations of authority
to be submitted to the Commission for
disposal as and when completed. The
State Governments have also been
requested to take whatever remedial action
they deem fit in the meanwhile.

(V) Selected complaints will be dealt with by
the Commission through its own investiga-
ting agency.

1.8 From September 29, 1977 the Commission

I commenced hearing of oral evidence of witnesses in
•cases Calling within its terms of reference and which
were regarded as of sufficient importance.

1.9 Since the terms of reference did not name any
individual or body of individuals as responsible for
the commission of an excess as understood in a
compendious sense, and the excesses were also set
out in general terms, the Commission in the first
instance invited persons, who appeared from the
investigations made by the officials of the Commission

and from the complaints received, either to be
responsible for the excesses or to be victims of the
excesses, or being otherwise able to throw light upon
the commission of the excesses, and examined those

persons.

1.10 At that stage, the Commission requested the
persons concerned to come before the Commission
and to assist the Commission in regard to certain
transactions. A large number of persons appeared
in pursuance of the request of the Commission. Some
of those requested did not choose to appear before the
Commission, some appeared, at certain stages and
thereafter did not appear and raised objections after
appearing before the Commission and declined to
participate in the proceedings of the Commission.

1.11 Evidence of the persons who showed willing-
ness to assist the Commission was heard in all' but
a very few cases, in open Session. In the larger
public interests, in-camera sittings were held in a few
cases for examining certain witnesses. If on a
consideration of the evidence, it appeared to the
Commission necessary to inquire into the conduct of
any person or the Commission was of the opinion that
the reputation of any persons was likely to be affected
by the inquiry, the Commission issued notices to such
persons giving them opportunities of being heard in
the inquiry and to furnish to the Commission, state-
ments relating to the matters specified in the notice
under rule 5(2) (a) of the Commissions of Inquiry
(Central) Rules, 1972. The Commission also
issued summons under section 8B ,of the Act affording
them reasonable opportunities of 'being heard in the
inquiry and to produce evidence regarding their
versions: The Commission also afforded
opportunities to these persons to cross-examine
witnesses other than the witnesses produced
by them and to address the Commission. The
Commission also afforded opportunity to all the
parties to be represented by legal practitioners.

1;12 After hearing the evidence of the persons to
whom notices under section 8B were issued and of
the evidence of the witnesses produced in support of
the versions of those pattios and also considering the
evidence of the witnesses, who had been examined
for the Commission and' whose presence was requested
by the parties to whom tiotices under section 8B had
been issued, the Commission gave to the parties or
their Advocates opportunity to address the Commission
on the evidenm,

1.13 It may, however, be observed that the request
made by Smt. Indira Gandhi, to whom notices trader
section 8B had been issued, to examine the investiga-
ting officers, was not allowed because the investigating
officers were neither witnesses to the transactions in
regard to which the evidence was collected, nor were
they i witnesses Cor the Commission. No request was
made to examine the investigating officers as witnesses
in support of the version of Smt. Gandhi,

CHAPTER II

2.1 A few minutes before the' midnight of June 25,
1975, the President of India proclaimed Emergency
under Article 352 of the Constitution. The order
promulgating the Emergency was published in the
Gazette of India, Extraordinary, on the June 26,
1975. It reads :

NOTIFICATION

G.S.R. 353(E). The following Proclamation of
Emergency by the President of India, dated
the 25th June, 1975, is published for gene-'
ral information : —

"PROCLAMATION OF EMERGENCY"

"In exercise of the powers conferred by
clause (1) of Article 352 of the Con-,
stitution, I, Fakhruddin Ali Ahmed/
President of India, by this proclamation
declare that a grave emergency exists
whereby the security of India is threat-
ened by internal disturbances."

2.2 There was, however, already in force a Pro-
clamation of Emergency, which was issued on Decem-
ber 3, 1971, by the President of India on the ground
that the security of India was threatened by external
aggression. Thereafter on December 4, 1971 the
Defence of India Rules, 1971 were published.

2.3 By virtue of Article 35S of the Constitution
freedoms guaranteed under Article 19 of the Consti-
tution restricting the power of the State to make any
law or to take any executive action which the State
would but for the provisions contained in Part III be
competent to make or to take, remained suspended
till the withdrawal of the Emergency proclaimed on
June 25, 1975.

2.4 After the declaration of Emergency, the
President of India issued an order under Article 359
of the Constitution on June 27, 1975, suspending the
right to move any court for the enforcement of funda-
mental rights conferred by Article 14, 21 and 22 of
the Constitution.

2.5 The following
were made :—

1975:

important statutory provisions

The Defence of India (Amendment) Act, 1975
(No. 32 of 1975) dated July 31, 1975.

This Act extended the provisions of the Defence of
India Act, 1971, till the proclamation of Internal
Emergency lasted and for a period of six months
thereafter. It also added words like internal security
and internal disturbances in the preamble of the prin-
ciple Act.

2. The Conservation of Foreign Exchange and Pre-
vention of Smuggling Activities (Amendment)
Act, 1975 (No. 35 of 1975) dated August 1,
1975.

This amendment provided for the following :—

(a) no detention order under the Act should, be
invalid or inoperative merely because some
of the grounds of the order are vague, non-
existent, not relevant or invalid for any
reason;

(b) no person detained under this Act shall be
released on bail, bail-bond or otherwise ;

(c) the detention could be made for dealing
effectively with the Emergency and in such
contingency no grounds need be conveyed
to the detenu.

3. The Maintenance of Internal Security (Amend*
inent) Act, 1975 (No. 39 of 1975) dated August
5, 1975.

This amendment provided for : —

(a) revocation of a detention order shall not
bar making another detention against the
same person;

(b) person detained under section 15 shall not
be released on bail, bail-bond or otherwise;
and

4. The Election Laws (Amendment) Act, 1975
(No. 40 of 1975) dated August 6, 1975.

This , amendment provided for : —

(a) every case of disqualification under section
8A shall be referred to the President who
could condone it in consultation with the
Election Commission;

(b) Section 77 (i) of the Act was amended to
replace date of publication of the notifica-
tion calling the elections by words "the .
date on which he has been nominated" and
also excluding the actions of the govern-
ment servants in normal discharge of their
duties like making arrangements etc.;

(c) publication in gazette notification regarding
appointment and resignation of a govern-
ment servant shall be treated as an effective
proof of the same,

i'ii,.-w ■ em

The above amendments were given retrospective
effect . covering even the election petitions pending
before the Courts including appeals before the
Supreme Court.

5. The Constitution (Thirty-eighth Amendment)
Act, 1975 dated August 1, 1975.

By the Thirty-eighth Amendment Act power to
issue Ordinances by the President, the Governor and
the Administrator under the relevant provisions of
the Constitution was conferred, laying down that
their satisfaction as to the necessity of immediate
action shall be final and conclusive and. shall not be
questioned in any Court on any ground. The Thirty-
. eighth Amendment also entitled the President to issue
different proclamations on different grounds and to
malce satisfaction of the President as to the emer-
gency final and conclusive. During the Emergency
the satisfaction and the declaration of the Emergency
could not be questioned in any Court on any ground.

6. The Constitution (Thirty-ninth Amendment) Act,
1975 dated August 10, 1975.

This amendment inter alia provided for : —

(a) the election of President and Vice-President
shall not be questioned in any Court;

(b) similarly, elections of the Prime Minister
and the Speaker of the House were placed
above the law Courts and were to be judg-

■ ed by a Body/Authority to be constituted
by the Parliament.

The . above mentioned amendments prevented even
filing of election petitions against the named persons
and even pending petitions/ abated. "

1976:

7. The Maintenance of Internal Security (Amend-
ment) Act, 1976 (No. 14 of 1976) dated
January 25, 1976.

The amendment inter alia provided for : —

. (a) re-detention of a person whose "order has
been earlier revoked;

(b) authorising Central Government to obtain
details regarding detentions from the State
Governments;

' r- one.

8. The Maintenance of Internal Security (Second
Amendment) Act, 1976 (No. "78 of 1976) dated
August 25, 1976.

This amendment made Section 16A applicable
from June 29, 1975 with retrospective effect. By
this amendment the maximum period of detention
was extended from' 12 to 24 months.
S/39 HA/77— 2

9. The Press Council (Repeal) Ac(, 1976 (No. 24
of 1976) dated February .2, 1976.

The Press Council Act, 1965 was repealed from
January 1, 1976 dissolving the Press Council of
India and also abating of cases, suit, appeals etc.,
pending before Court in which Press Council was a

party,

10. The Prevention of Publication of Objectionable
Matter Ad, 1976 (No. 27 of 1976) dated
February 2, 1976.

This Act provided for : — ■ ■

(a) inclusion in the expression "objectionable
matter" any words, signs or visible repre-
sentations which are defamatory of the
President of India, the Vice-President of
India, the Prime Minister or the Speaker of
the House of the People or the Governor
of a State;

(b) seizure of copies of the publication made in
disobedience of the Central Government
order prohibiting the printing or publica-
tion, closure of any printing press or other
instrument or apparatus used in the publi-
cation;

(c) power to demand security from the presses,
publishers and editors of newspapers and
news sheets, when it appears to the compe-
tent authority that the publication con-
tains any objectionable matter;

(d) power of the Central Government to declare
certain publications forfeited. ' .■'

11. Parliamentary Proceedings (Protection of Publi-
cation) Repeal Act, 1976 (No. 28 of 1976)

dated February 11, 1976. :

By this Act the Parliamentary proceedings (Pro
tection of Publication) Act, 1965 was repealed and
came in force from December 8, 1975. .

12. The Constitution (Forty Second Amendment)
Act, 1976 dated December 18, 1976.

The Constitution was extensively amended by 59

clauses.

1977:

13 The Representation of the People (Amendment)
Ordinance, 1977 (No. 1 of 1977).

The Ordinance amended the Section 8(a) of the
Act substituting the words that the President shall
act on the advice of the Election Commission with
regard to disqualification : "shall consult the Election
Commission and the Election Commission may for
this purpose make such enquiries as it thinks fit".

14. The) Disputed Elections (Priine Minister and
Speaker) Ordinance, 1977 {No. 4 of 1977).

'By. this Ordinance a council was constituted in
case of disputed elections of the Prime Minister and
the Speaker as per the earlier amendment in the
People's Representation Act.

15, The Presidential and- Vice-Presidential Elections
' {Amendment) Ordinance, 1977 (No. 3 of 1977).

This Ordinance made similar provisions as above
in case of President and Vice President.

2.6 After the declaration of Emergency a number
of legislative and regulatory measures . were taken
with a view to impose censorship on the Press. On
June 26, 1975, a Censorship Order was passed by
the Central Government under. Rule (1) of the De-
fence of India Rules, 1971. On July 5, 1975, the
Central Government directed that an order made
under Rule 4S of the Defence and Internal Security
Rules by .a State Government or by any office oi
authority authorised in this behalf by the State Gov-
ernment before July 15, 1975, should not continue on
or after that date, except in accordance with such
instructions as. the Central Government might give to
the State Government in that behalf.

'•! 2.7 On July 6, 1975, a notification was issued by
the Centra] Government and a new sub rule was in-
serted in Rule 48. The Censorship Order was amend-
ed on July 6, 1975, and on July 13, 1975, confi-
dential instructions were issued by the Chief Censor
to the Censoring authorities in the States. On July
31, 1975, the Defence of India (Amendment) Ac!,
1975 (Act 32 of 1975) was repealed and re-enacted
as the Defence of India (Amendment) Ordinance,
1975. On August' 5, 1975, guidelines for the Press
were issued by the Chief Censor. On August 11,
1-975, a notification was issued by the Central Gov-
ernment further amending Rule 48 by enacting De-
fence and Internal Security of India (Second Amend-
ment) Rules, 1975. On August 12, 1975, a notifi-
cation was issued by the Central Government enact-
ing the Defence and Internal Security of India (Third
Amendment) Rules, 1975, whereby Rule 48 of the
said Rules was further amended.

■2.8 On January 8, 1976, a Presidential Order was
issued under Article 359(1) of the Constitution sus-
pending the right to move any court for the enforce-
ment of fundamental rights conferred. by Article 19
of the Constitution, On March 13, 1976, orders
were issued by the Central Government amending the
Central Censorship order.

2.9 The declaration of Emergency and the conse-
quent suspension of the fundamental rights under
Article 19, resulted in the suspension of the protec- i
tion of Articles 14, 21 and 22 by the issue of the'
Presidential order in exercise of the powers under
Article 359 .of the Constitution, and by the amend-
ment, of Article 352 making the satisfaction of the
President final and conclusive and not liable to be
questioned in any court on any ground and subject
to the provisions of clause (2) taking away the juris-
diction of the Supreme Court or any other court to'
entertain any action on any ground regarding the
validity of the declaration made by the proclamation
of the President to the effect mentioned in clause (I)
or to the continued operation of the proclamation,
and restrictions imposed upon the authority of the.
courts to grant protection., against the infringement
of basic human rights enumerated in Article 19; all
protection against arbitrary action was taken away for
the duration of the Emergency. The right of equality
under Article 14, the right of fundamental guarantee'
against deprivation of life and personal liberty
according to procedure established by law also stood
suspended and the protection against arrest and de-
tention could not be challenged' before the courts.
The right of free speech and expression, right to
assemble peacefully, to form associations and unions;
to move freely throughout the territory of India; -to
reside and settle in any part of the territory of India;
to acquire, hold and dispose of property and to
practice any profession, or to carry on any occupa-
tion, trade or business, which were guaranteed under
clause (1) of Article 19, could not thereafter be
exercised.

2.10 As a sequel to this a number of restrictions
were imposed upon the newspapers by the issue of
Censorship Orders and the amendments thereafter
from time to time. Jurisdiction of the Courts to
entertain actions designed to challenge the validity of
actions, legislative and executive, of the State were
also circumscribed.

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CHAPTER ill

In the first instance the procedure followed by the
Commission may be explained because certain persons
and especially Smt. Indira Gandhi, former Prime
Minister; arid Shri .Pranab Kumar Mukherje.e, a
former Minister of State in the Ministry of Finance,
raised objections to ' the legality of the procedure
followed by the Commission; and have on the plea
of illegality of procedure declined not only not to
assist the Commission but even have declined to file
statements relating to their versions of the transactions
which formed the subject-matter of inquiries into
excesses in which they appeared to be concerned and
'to take oath and give evidence pursuant to notices
under- section 8B of the Commissions of Inquiry Act,
1952. Section 3 -of- the Commissions of Inquiry Act,
1952, provides —

"(1) The appropriate Government . may, if it is

of opinion that it is necessary so to do, and

shall, if a resolution in this behalf is passed

by the House of the People or, as the case

may be, the Legislative Assembly of the

State, by notification in the Official Gazette,

appoint a Commission of Inquiry for the

purpose of making an inquiry into any

definite matter of public importance and

performing such functions and within such

time as may be specified in the notification,

■:. ,', : .__ . and the Commission so appointed shall-make

-.;' ' : --... the inquiry and perform the functions

:. : . accordingly ;

Provided that '

(2) .

(3)

(4)

* ■

*\*<

■ Section 4 provides that the Commission shall
.have the powers of a civil court, whife trying a suit
under the Code of Civil Procedure, 1908, in respect
of the following matters, namely : —

"(a) summoning and enforcing of attendance
of any person from' any part of India and
examining him on oath;

(b) requiring the discovery and production
of any document;

(d) requisitioning any public record or copy

thereof from any court or office;

(e) issuing commissions for the examination
of witnesses or documents^,

(f) any other matter which may be prescribed."

Section 5 provides for the conferment of additional
powers on the Commission:

"(1) Where the appropriate Government is of
opinion that, having regard to the nature of

the inquiry to be made and other circum-
stances of the case, all or any of the
provisions of sub-section (2) or sub-seclion
(3) or sub-section (4) or sub-section (5)
should be made applicable to a Commission,
the appropriate Government may, by
notification in the Official Gazette, direct
that all or such of the said provisions 'as
may be specified in the notification shall
apply to that Commission and on the issue
of such a notification, the said provisions
shall apply accordingly.

(2) The Commission shall have the power to
require any person, subject to any privilege
which may be claimed by that person under
any law for the time being in force, to
furnish information on such points or matters
as, in the opinion of the Commission, may
be useful for or relevant to, the subject
matter of the inquiry and any person so
required shall be deemed to be legally
bound to furnish such infoimation within
the meaning of section 176 and section 177
of the Indian Penal Code.

(3) The Commission or any officer, not below
.__. . the. rank of a gazetted officer, specially

authorised in this behalf by the Commission
may enter any building or place .where the
Commission has reason to believe that any
books of account or other documents relating
to the subject-matter of the inquiry may be
found, and may seize any such books of
account or documents or take extracts or
copies therefrom, subject to the provisions
of section 102 and section 103 of the Code
of Criminal Procedure, 1898, in so far as
they may be applicable.

(4) * * * *

(5) * * * *

Under section 5A it is provided :

"(1) The Commission may, for the. purpose of
conducting any investigation pertaining to
the inquiry, utilise the services, —

(a) in the case of a Commission appointed by

the Central Government, of any officer or
investigation agency of the Central
Government or any State Government * *

(b) * * ' * ■ *

(2) For the purpose of investigating into any
matter pertaining to the inquiry, any officer
or agency whose services are utilised under

sub-section (1) may, subject to the direction
and control of the Commission, —

(a) summons and enforce the attendance of any

person and examine him ;

(b) require the discovery and production of

any document; and

thereof from any office.

(3) * # * *

(A) The officer or agency, whose, services are
utilised under sub-section (1) shall investi-
gate into any matter pertaining .to the in-
quiry and submit a report thereon (here-
after in this section referred to as the
investigation report) to the Commission,
within such period * * *

(5) The Commission shall satisfy itself about the
correctness of the facts stated and the con-
clusions, if any, arrived at in the investi-
gation report submitted to it under sub-
section (4), and for this purpose the Com-
mission may make such inquiry (including
the examination of the person or persons,
who conducted or assisted in the investiga-
tion) as it thinks fit.

(6) No statement made by a person in the course
. ; - of giving evidence before the Commission

. shall subject him to, or be used against
him in, any civil pr criminal proceeding ex-
cept a prosecution for giving false evidence
by such statement :

Provided that the statement —

fa) is made in reply to a question which he is
required by the Commission to answer,
pr

(b) is '.relevant to the subject-matter of the
inquiry."

Section 8 provides :

"The Commission shall, subject to any rules that
may be made in this behalf, have power to
regulate its own procedure (including the
fixing of places and times of its sittings and
deciding whether to sit in public or in
private)."

"Section 8B provides:

"If, at any stage of the inquiry, the Commis-
sion, —

(a) considers it necessary to inquire into the
conduct of any person; or

(b) is of opinion that the reputation of any
person is likely to be prejudicially affect-
ed by the inquiry,

The Commission shall give to that person
a reasonable opportunity of being heard in

the inquiry and to produce evidence m his
defence :

Provided that . * *

Section 8C provides ;

"The appropriate Government, every person re-
ferred to in section 8B and, with the pei'-
• mission of the Commission, any other per-
son whose evidence is recorded by the
Commission, — ,

(a) may cross-examine a witness other than a

witness produced by it or him ;

(b) may address the Commission ; and

by a legal practitioner or, with the per-
mission of the Commission, by any other

person."

Section 11 provides : ■

"Where any authority (by whatever name called),
other than a Commission appointed under
section 3, has been or is set np under any
resolution or order of the appropriate
Government for the purpose of making an
inquiry into any definite matter of public
importance and that Government is of
opinion that all or any of the provisions of
this Act should be made applicable to that
authority. The Government may, subject to
the prohibition contained in the proviso to
sub-section (1) of section 3, by notification
in the Official Gazette, direct that the said
provisions of this Act shall apply to that
authority, and on the issue of such a notifi-
cation that authority shall be deemed to be
: a Commission appointed under section 3 for
the purposes of this Act."

By Section 12 power is conferred upon the appropriate
Government to make Rules, to carry out the purposes
of the Act.

3.1 Pursuant to the power conferred by section
12, the Central Government have published on July
15, 1972, the Commission of Inquiry (Central)
Rules, 1972. Rule 5 sets out the procedure of
inquiry :

"(1) A Commission may sit in public or in
private as it thinks fit :

Provided that a Commission shall sit in
private on a request being made by the
Central Government in that behalf.

(2) A Commission shall, as soon as may be
after its appointment —

(a) issue a notice to every person, who in its
opinion should be given an opportunity
of being heard in the inquiry, to furnish
to the Commission a statement relating
to such matters as may be specified in
the notice ;

lS^:r.■s;SJfc'V^^-l^s"'i»-"'•■ i '"""" J,

■ (b). issue a notification, to be published in
such manner as it may deem fit, inviting
all persons acquainted with the subject
matter of the inquiry to furnish to the
Commission a statement relating to such
matters as may be specified in the
notification.

(3) Every statement furnished under clause (a)
of sub-rule (2) shall be accompanied by an
affidavit in support of the 'facts set out in
the statement sworn by the person furnish-
ing the statement.

(4) Every person furnishing a statement under
clause (a) of sub-rule (2) shall also furnish
to the Commission along with the statement
a list of the documents, if any, on which he
proposes to rely and forward to the Com-
mission, wherever practicable, the originals
or true copies of such of the documents as
may be in his possession or control and
shall state the name and address of the
person from whom the remaining docu-
ments may be obtained.

(5) (a) A Commission shall examine all the
statements furnished to it under clause (b)
of sub-rule (2) and if, after such examina-
tion, the Commission considers it necessary
to record evidence, it shall first record the
evidence, it any, produced by the Central
Government and may thereafter record

■ evidence in such order as it may deem fit, —

: (i); the evidence of any person, who has
furnished a statement under clause (a)
of sub-rule (2) and whose evidence the
Commission having regard to the state-
ment, considers relevant for the purpose
of the inquiry ; and

(ii) the evidence of any other person, whose
evidence in the opinion' of the Commis-
sion is relevant to the inquiry :

Provided that the Commission may dispense with
the attendance of any person for the purpose
of giving evidence before it if in its
opinion — -

(i) such attendance cannot be enforced
except by causing undue hardship or
inconvenience to that person ; or

(ii) such attendance should be dispensed
with for any other sufficient reason to be

recorded by it in writing.

(b) If after all the evidence is recorded under
clause (a) of sub-rule (5), the Central
Government applies to the Commission to
recall any witness already examined or' to
examine any new witness, the Commission,
if satisfied that it is necessary for the proper
determination of any relevant fact to do so,
shall recall such witness or exmine any such
new witness.

(7) The Commission shall have the powers of
a civil court to make local investigation,
either personally or through any person,
duly authorised by it, into any matter falling
within its terms of reference.

(8) A Commission shall have the power to
regulate its own procedure in respect of
any matter for which 'no provision is made
in these rules."

3.2 The Commission framed certain Regulations'

relating to Regulations of Procedure to be followed
by the Commission in exercise of the' powers conferred
by clause (8) of Rule 5.

3.3 By the Act the appropriate Government is
audiorised to set up a Commission of Inquiry for
determining the facts and circumstances relating to
any matter of public importance. The appropriate
Government is authorized to appoint a Commission,
which shall exercise the powers set out in section 4
of the Act. The Commission may be invested with
additional powers under sections 5 and 6 for utilising
the services of officers and investigating agencies for
conduct of investigations pertaining to the Inquiry. The
function of the Commission is to determine facts rela-
ting to the matters of definite public importance for the
purpose of making inquiries thereto.

3.4 The proceedings of the Commission are, neither
of the nature of a civil suit, where contesting parties
are arrayed on opposite sides, one pleading that a civil
right has been infringed and the other contesting that
claim. Nor are the proceedings of the nature of a
criminal proceeding, in which it is pleaded that a per-
son or persons have committed infraction of the law
and has or have on that account incurred liability for
imposition of a penalty prescribed by law. In the case

"for trial of a suit the function of the court is to deter-
mine the civil rights and to grant appropriate relief
to the person claiming to be aggrieved ; if the infraction
o'f his right is proved, the liability of the person infring-
ing the tight is established : in a criminal trial the
function of the court is* to determine whether the
action of a person charged with the commission of an
infraction of a law is' established to have been com-
mitted by him and whether such an infraction is
established beyond reasonable doubt. These proceedings
are adversary proceedings — one party alleging existence
of a certain right and the other party denying the right
or the statement of the complainant alleging infraction
of the law by the other party and the other party
denying such infraction.

3.5 Functions of the Commission under the Act
are, however, of an entirely different nature. The Com-
mission is not concerned with the establishment of any
civil ,rights or the infraction of those rights. The Com-
mission is also not concerned to determine the
infraction of any laws involving the imposition of any
penalty upon, a person charged with the commission of
infraction of a law. ^The proceedings before the Com-'
mission are not of 'an adversary character. It is the

.10

duty of the Commission appointed for that purpose to
make an inquiry into the subject matter of the "inquiry
if the subject-matter is of definite public importance.
For that purpose, the Commission is invested with
certain powersj set out in section 4 and 5 of the Act.

3.6 The Commission, constituted under section 3
o'i the Commissions of Inquiry Act, may be called
upon to 'hold inquiries into a yariety of matters of
definite public importance, The matters of public im-
portance may relate to the conduct of a particular
person, or a group of persons, or as in the present case
to investigate into a definite matter/matters of public
importance. The Commission may be invested with
the powers to hold an Inquiry into certain transactions
without specifying the names of persons responsible
therefor ; and leaving it to the Commission to deter-
mine : (i) whether the transaction relating to a matter
of public importance, referred to in the terms- of
reference has been committed ; and (ii) to identify the
person or persons primarily responsible therefor. In
view of the variety of transactions or subject matters
in respect of which the Commission may be appointed
to inquire, the Legislature has not prescribed any defi-
nite form of procedure; and has left it to the Commis-
sion by section 8 to regulate its own procedure. This
power is, however, not unguided and is subject to the
Rules that may be made in that behalf by the Central
Government. The Commission is, in each case, having
regard to the nature of the inquiry to be made and
having also regard to the nature of the definite matters
of public importance, which it is called upon to inquire
into, authorised to regulate its own procedure, but
subject to such Rules which the Central Government
may make in that behalf. Certain other restrictions
are also imposed by sections 8B and 8C on the power
Of the Commission to regulate its own procedure. In
other words, the Commission must be guided in adopt-
ing its procedure by the Rules prescribed in that be-
half; and also comply with the requirements, of sections
SB and 8C of the Act.

3.7 In disposing of the objections raised by Smt.
Indira Gandhi by the order of the Commission dated
December 5, 1977, the Commissioii observed that it
proposed to follow a procedure, which after consi-
derable thought the Commission felt advised to follow
in holding the inquiry in regard to the terms of refe-
rence for making inquiry ; first, to determining whether
an excess falling within the terms of reference was
committed : and if the Commission was satisfied on a
consideration of the materials placed before it that
there was, prima facie, evidence of the commission of
any excess, or excesses and such other evidence which
may be given before the Commission to supplement
the same, by persons invited to appear before the
Commission, the procedure prescribed for summoning
persons, who may appear to be involved in the com-
mission of those excesses, would be resorted to, to
appear before the Commission, and explain after an
appropriate notice under rule 5(2) (a) was issued and
an opportunity was given to such persons under section
SB of the Act.

3.8 It was made clear that at that stage the Com-
mission was not compelling any person to come before

the Commission. The Commission was only inviting
persons who could assist the Commission in the investi-
gation with regard to the alleged excesses ; to appear
before the Commission ; and that if the Commission
was satisfied on a perusal of the materials placed
before it :

"(i) as to the commission of an excess ;' and

(ii) the prima jade evidence of his or her
involvement in the commission of that
excess,"

the inquiry would be held strictly in accordance with
the terms of sections 8B and 8C of the Act. .

3.9 After consideration of the evidence o'f witnesses,
who had come to assist the Commissioii in regard to
various transactions in the light of the investigations
made by investigating staff ; and the documents within
its cognizance, the Commission issued notices to several
other persons under rule 5(2) (a) of the Commission
o£ Inquiry Rules, 1972, calling upoii them to file their
statements relating to certain matters, specified in the
notices issued to them. Summonses were also issued
under section 8B of the Commissions of Inquiry Act.

3.10 Smt. Indira Gandhi objected to this procedure ;
and declined to file a statement pursuant to the notice
under rule 5(2) (a) and in the manner provided in
rule 5(3) and to take oath or give evidence on oath ;
and raised a number of objections, which are
broadly:—

(i) that the procedure followed by the Com-
mission is improper or illegal ;

(ii) that her refusal to file a reply or a statement,
as required under rule 5(2) (a) as justified
because the notice was not issued, with the
least practicable delay and in any event, when
a notice/summons under section 8B of the
Act has been .issued, such a notice under
rule 5 (2) (a) cannot be issued ; and

(iii) that the appropriate procedure for hearing
of the Commission must be analogous to the
procedure in a criminal trial, that is, the
person, to whom a summons is issued under
section 8B is in a position of an accused
person ; and, therefore, cannot be subjected
to cross-examination.

Objections were also raised on a number of subsidiary
matters, inter alia, — .

(a) that the terms of reference of the Commission
are vague ;

(b.) that the Commission has no power to inquire
into the circumstances, which preceded the
declaration of Emergency and the manner in
which the advice for the declaration of
Emergency was given ;

(c) that the transactions, which commenced after
.Time 25, 1975, or shortly before that may be
inquired into, but no transaction, which com-
menced at a point of time appreciably longer
than a few days prior to June 25th, 1975,
can be inquired into ;

'■' s? -ff9MWl

:■,' . L3.Y.-.1-."- '■■

: .'(d) that no opportunity to note the. demeanour
of the witness, who had already been examin-
ed by the Commission was given to persons
to whom summonses under section 8B were
issued and, therefore, the proceedings would'
. be regarded as.vitiated ; and

(e) that since under the Commissions of Inquiry
Act that failure to tell the truth before the
investigating officer or making a statement
inconsistent with, a statement made before
the investigating officer is liable to be made
the subject matter of a prosecution for per-
jury, _ the investigating officers must be
examined by the Commission or be brought
before the Commission, so that the person to
whom a summons is issued under section 8B
is entitled to cross-examine those investigating
officers.

. 3.10A In dealing with these objections the Commis-
sion observed that the proceedings before the
Commission are taken under the terms of reference for
determining the truth in respect of certain transactions
. or certain matters, set out in the terms of reference.
The proceedings, therefore, cannot assume the form
of a proceeding of a civil trial nor of a criminal trial,
where some person is accused of the commission of
a'n offence. It was also observed :

It is necessary to emphasise this fact because the
argument persistently advanced before me by Counsel
for Smt. Gandhi was that the proceedings before the
Commission must, be, if not actually assimilated, made
similar to a proceeding relating to a criminal trial ; and
in support of that contention, the argument was pri-
marily based upon the terms of section SB of the Act.
It may be pointed out that the proceedings before a
Commission of Inquiry disclose characterists sub-
stantially different from a trial of a suit or a criminal
prosecution. From the very nature of the proceedings,
it will not be an adversary proceedings, i.e. where
there is either a plaintiff or defendant or a prosecutor
and an accused person, but the proceedings will be of
the nature of 'inquisitorial', When I say 'inquisitorial',
it must be shorn of all the sinister aura the expression
'inquisitorial' has acquired because of association in
certain foreign countries where inquisitions were held
under circumstances as a part of religious persecution.
(When I say 'inquisitorial', it means that the presiding
officer takes upon himself the duty to ascertain the
facts through witnesses after giving opportunity to per-
sons concerned, who may be affected by the determina-
tion of facts.) Whether the inquisitorial method is
better in an academic sense, than the adversary method
is not a matter with which I am concerned. The Act
has adopted the inquisitorial method. Qri that! can
do np belter than cite what Lord Justice Salmon said
in his report on the Royal Commission on Tribunals of
Inquiry, 1966 :

"27. The exceptional inquisitorial powers con-
ferred upon a Tribunal of Inquiry under the
Act of 1921 necessarily exposes the ordinary
citizen to the. risk of having aspects of his
private life, uncovered which should other-

wise remain private and to the risk of having
baseless allegations made against him. This
may cause distress and injury to reputation.
For these reasons, we are strongly of the
opinion that the inquisitorial machinery set
up under the Act of 1921 should never be
used for matters of local or minor public
importance, but always be confined to matters
of vital public importance concerning which
there is something in the nature of nation-
wide crisis of confidence. In such cases, we
considered that no other method of investi-
gation would be adequate."

"28. Normally persons cannot be brought before
.. a Tribunal and questioned save in civil or
criminal proceedings. Such proceedings are
hedged around by long-standing and effective
safeguards to protect the individual. The
inquisitorial procedure is alien to the concept
of justice generally accepted in the United
Kingdom. There are, however, exceptional
cases in which such procedure must be used
to preserve the purity and integrity of our
public life, without which a successful demo-
cracy is impossible. It is essential that on
the very rare occasions when crises of public
confidence occur evil if it exists shall be
exposed so that it may be rooted out or if it
does not exist, the public shall be satisfied
that in reality there is no substance in the
prevalent rumours and suspicions by which
..<-...- they have been disturbed. We are satisfied
that this would be difficult, if not impossible,
without public investigation by an inquisi-
torial Tribunal possessing the powers con-
ferred by the Act of 1921. Such a Tribunal
is appointed by Parliament to enquire and
report."

"30. There are important distinctions between in-
quisitorial procedure and the procedure in
an ordinary civil or criminal case. It is in-
herent in the inquisitorial procedure that
there is no lis. The tribunal directs the en-
quiry and the witnesses are necessarily the
tribunal's witnesses. There is no plaintiff or
defendant, no prosecutor or accused; there
are no pleadings defining issues to be tried,
no charges, indictments or depositions. The
inquiry may take a fresh turn at any moment.
It is, therefore, difficult for persons involved
to know in advance of the hearing what
allegations may be made against them."

3.11 After setting out the terms of reference, it was
observed that the Commission had the power under
section 8 of the Commissions of Inquiry Act and was
obliged to devise a procedure, which would be fair to
every one concerned and within which the Commission
would effectively perform the duties entrusted to it to
hold the inquiry. For that purpose, it was considered
necessary to have investigation made by the investiga-
ting staff of the Commission. In the very nature of
things, such investigation could not be complete. It
was, therefore, thought necessary to ask persons

cognisant of the transactions to 'appear before the
Commission to assist the Commission in making the
inquiry. It was then made clear that there was no
compulsion upon anyone to come before the Commis-
sion. It was only a request to assist the Commission
in the due performance of its duties.

3.12 After setting out the terms of rule 5, it was
observed that it was obligatory upon the Commission
to issue a notice, both under clause 2(a) of rule 5 aud
notification under clause 2(b). A notification was
issued generally inviting the public to make complaints
under clause 2(b). But rule 5(2) (a) could not be
complied with at that stage because under the terms
of reference, the Commission could not without adding
a preliminary inquiry ascertain the persons, who may
be given an opportunity of being heard in the inquiry
under rule 5(2) (a) . The Commission was called upon
to make an inquiry into certain matters, but without
indicating the involvement of any named persons. It
was, therefore, necessary for the Commission to identify
the persons to whom notice must be given. It was also
necessary in order to maintain some regulation and
control over the proceedings, before the Commission
was, prima facie, satisfied, whether there had or had
hot been committed an excess, following the terms of
reference. For that purpose letters of request were
sent to various persons to come before the Commission,
whose names appeared to have been disclosed on the
investigations made by the officers. After holding this
inquiry and perusing the statements made before the
investigating staff, it was thought necessary, when it
appeared that the Commission could form an opinion
that certain persons should be given an opportunity
of being heard in the inquiry, and notices under rule
5(2) (a) were given. The Commission was also satis-
fied that if inquiry is held, which it was directed to
make in regard to the five items, the holding of the
inquiry may. affect the reputation of certain persons,
or that it would be necessary to investigate into f the
conduct of those or certain other persons. The Com-
mission, accordingly, directed that summonses be issued
under section 8B of the Act. Thereupon, notices under
rule 5(2) (a) and summonses under section SB were
issued by the Commission, Pursuant to these notices
under rule 5(2) (a) some persons filed their statements,
while others did not.

. 3.13 Referring to the contentions that notice under
rule 5(2) (a) was not issued "as soon as may be"
after the appointment of the Commission, the Com-
mission observed that an earlier stage for issuing the
notice against any person, who in the opinion of the
Commission, should be* given an opportunity of being
heard in the inquiry, could not be conceived of unless
that person was identified. It was for that reason that
the preliminary inquiry was held to identify the person,
who, in the opinion of the Commission, should be
given an opportunity of being heard. The Commission
gave them opportunity to furnish statements relating
to such matters by issuing notices under rule 5 (2) (a).
The Commission pointed out that rule 5(2) (a) makes
it obligatorv for the Commission to issue the notice
■ to everv perso'n, who, in the opinion of the Commission,
should be given an opportunity of being heard in the
inquiry to furnish to the Commission a statement relat-
ing to such matters, as may be specified in the notice.

The Commission has no power to dispense with the
issue of the notice and the submission of the counsel
to dispense with the notice could not be
acceded to. ■ The notices, in fact, had been
issued, requiring the persons to whom they
were issued, to file their version and statement of
facts in support of the version set out in their state-
ments. They were also required to file lists of docu-
ments oil which those persons relied and to forward
to the Commission those documents. This was the
stage at which the person, who in the opinion of the
Commission was required to furn ; .sh_ a statement rela-
ting to the matters specified in the notice, was identified.
At no earlier stage could such notice be given. Under
the provisions of the Act, the next stage of holding
an inquiry on the statements filed bs'fore the Commis-
sion commences thereafter. At the earlier stage, wit-
nesses would be examined— all would be witnesses for
the Commission. If, however, it appeared to the Com-
mission that it was necessary to inquire into the conduct
of any person, or in the opinion of the Commission
the reputation of any person was likely to be prejudi-
cially affected by the inquiry, the Act made it obligatory
that summons under section SB shall be issued. ,

3.14 Therefore, the Commission observed that
there was no warrant- for the view that once a notice
under section SB is issued, there is no obligation on the
part of the Commission to issue a notice under rule
5(2) (a), nor that the issuance of the notice under.
5(2) (a) is dispensed with, when a summons under
section SB is issued. It was observed :

"Rule 5(2) (a) and section 8 operate in different
..: ■ fields. Rule 5(2) (a) deals with a demand
from the Commission, in what may be loosely
called "pleading of the perso'n to whom the
notice is issued". Persons who, in the opinion
of the Commission, should be called upon to
have on that account an opportunity of
explaining certain matters, which have come
to the notice of the Commission at that stage.
The person to whom a notice has been issued,
is required to come and submit his statement
in regard to what his version of the matters
specified in the notice is. It is after the
statement is filed, the inquiry commences and
it is in the course of the inquiry that the
notice under section 8B will, if at all, be
issued. In order, however, that time may
not be wasted,

it was found necessary by me to issue a notice
under rule 5(2) (a) and also because it
appeared to me (Commission) from mate-
rials disclosed in the evidence at the stage Of
the inquiry collected by the investigating
officers and, further, on the preliminary in-
quiry held by me (Commission) that it will
be necessary to inquire into the' conduct of
certain persons and also that the reputation

;\::;;i!::\'.-L.:v;..:iV

13,

of certain persons was likely to be prejudi-
cially affected by the inquiry. On that
account this summons under section 8B was
issued."

3.15 The Commission rejected the contention of the
counsel for Smt. Indira Gandhi that once a summons
under section 8B is issued by the Commission, there
can be no scope for issuing a notice under rule
5 (2) (a), or that the proceedings before the Commis-
sion are either of the nature of a criminal inquiry or
quasi criminal inquiry or that the inquiry is in the
nature of a criminal proceedings.

3.16 It was also emphasised that the proceedings
before the Commission are Hor determining the truth
in the manner provided by the Act in respect of
matters of public interest specified in the terms of
reference. They are not civil proceedings, nor are they
criminal proceedings. They are not adversary proceed-
ings. They are proceedings in * which truth has
to. be determined by the adoption of a pro-
cedure to be devised by the Commission having regard
to the nature of the inquiry and which is essentially
inquisitorial in character, as prescribed by the Act.

. 3.17 The Commission also rejected the contention
raised by the counsel that it was obligatory -upon the
Commission to issue a notice under rule 5(2) fa) as
.soon as it appeared from any statement made before
the investigating officer that some persons were con-
cerned in the commission of any excess specified in the
terms of reference and if the notice was not issued
Soon thereafter,- such a notice could not be issued at
all,

3.18 The Commission also rejected the contention
urged in the alternative that the appropriate procedure
should have been that as soon as a witness appeared
before the Commission at the stage of the preliminary
hearing and made some statement which involved a
person in the commission of some impropriety, the
Commission was bound to issue a summons under sec-
tion SB and that the Commission had no' option to
act otherwise. It was observed that on the terms of
section 8B if the Commission at any stage of the
inquiry either deems it necessary to inquire- into the
conduct of any person or the Commission is ofopinion
that reputation of any person is likely to be pre-
i judicially affected by "the inquiry, notice under that
section must be issued. But until the Commission
entertains, on materials placed before it, an opinion
after consideration of the materials, there can be no
scope for issuing summons under section 8B. Section
SB requires that the Commission must consider it
necessary to inqmre into the conduct -of any person ;
and merely because some statement is made before
the Commission involving directly or indirectly any
person in the commission of an excess, without examin-
ing whether the statement in the light of the rest of the
evidence and circumstances is reliable, or whether
such a statement can be acted upon, it would be
impossible and, in anv event, improper for the Com-
mission to issut a summons under section 8B, merely
because some statement was made by some one
attributing impropriety to another person.
S/39 HA/77— 3

3.19 The contention raised by the counsel that the
person to whom a notice under rule 5(2) (a) or a
summons under section 8B is issued, cannot be called
upon to disclose his version of the incidents, which
form the subject matter of inquiry, because when a
serious allegation is made, which affects the reputation
of a person, the proceeding from that statement as-
sumes the form of a criminal trial or a proceeding
similar to or analogous to a criminal trial and that the
difference between the proceedings under section 8B
and a criminal proceeding would be minimal, was also
rejected.

3.20 Referring to the contention urged by the
counsel that the person to whom a notice is issued
under rule 5 (2) (a) cannot be called upon to disclose
his version of the incidents referred to in the notice,
because that would amount to "pre-empting the
defence" of that person, it was pointed out that the
contention is based upon a misconception of the true
nature of the proceedings and the express provisions
made in the Rules, which are part of the Act. Under
rule 5(2) (a) the Commission is under a statutory obli-
gation to call upon .persons, who in the opinion of the
Commission should be given an opportunity of being
heard, to furnish to the Commission a statement relat-
ing to such matters as may be specified in the Uotice ;
and obviously it could not mean that even though a
person is given an opportunity of being heard in an
inquiry, he should not be called upon to furnish to the
Commission a statement relating to the matters as may
be specified in the notice. Under the Act opportunity
must be given in those cases in which there is some-
thing to be investigated into or inquired into a finding
on which might be prejudicial to the conduct of the
person to whom notice has been issued.

.3.21 The Commission pointed out that rule 5(3)
expressly provides that the disclosure shall be made
on affidavit in support of the facts stated in the state-
ment sworn by the person furnishing the same.

3.22 It was contended that by calling upon a person
to file a statement under rule 5 (2) (a) disclosing his
version as regards certain incidents, there is pre-emp-
ting of the defence because that person is called upon
to make a statement in an inquiry before the Com-
mission : it was emphasised that the Commission has
to ascertain the facts and in ascertaining those facts
assistance of persons, who should be given opportunity
of being heard is asked for, and the persons, who are
given opportunity should make statements ofi oath
and also produce documentary evidence on which they
rely ; accordingly, therefore the contention was
rejected.

3.23 The Commission also rejected the contention
raised by counsel for Smt. Gandhi that a person to
whom a summons is issued under section 8B cannot
be cross-examined, since section 8C contemplates
cross-examination of witnesses only and a person who
deposes to the involvement of the person against whom
an inquiry is being- made and not of a person against
whom or in whose conduct an inquiry is being made.

This argument was sought to be supported on three
grpunds :

(i) under rule 5(2) (a) every person notwith-
standing the amplitude o'f the expression
used therein still excluded persons against'
whom some allegation of impropriety was
made;

(ii) the terms of section 8B, referred to a defence
to be made by a person whose conduct was
being inquired into or the reputation of that
person was likely to be prejudicially affected ;
and

(iii) in terms of section 8C the right of cross-
examination is conferred upon certain persons
and by implication it means that the person
whose conduct is being inquired into, is not
a person who can be cross-examined.

3.24 The Commission rejected these contentions
and observed that section SB confers the
basic protection to any person that he shall not be
condemned unheard by the Commission, i.e. his con-
duct should not be adversely commented upon by
reaching a finding that his version is "not true, without
giving him an opportunity of being heard. The finding
may be of impropriety or of an act which may amount
to an offence or anything which might bring him into
disrepute. If the Commission ..thinks it necessary to
inquire into the conduct of such a person, it is necessary
to give a notice under section 8B and that such a person
would obviously be a person against whom there is an
allegation made by someone. Similarly, it would be
necessary to issue a summons to the person, who in the
opinion of the Commission is likely to be prejudicially
affected by the holding of the inquiry. It was pointed
out that section 8C defines the contours of a reasonable
opportunity of being heard in the course of the inquiry.
Reasonable opportunity of being heard is not merely
of making an oral representation or denying what h
alleged but including right to appear by counsel, and
to cross-examine witnesses who depose against him
and to lead evidence to rebut that evidence and to
address the Commission. That, however, does not
mean that when the Commission is holding an inquiry
into the conduct of any person, such a person is
immune from cross-examination. The procedure,
which the counsel suggested should be followed is
that once a summons is issued under section 8B, there
is no scope for the issue of notice under rule 5 (2) (a) ;
and all the witnesses on behalf of the person who have
either made a complaint or whether there was no com-
plaint, where a reference has been made on behalf of
the Commission should be examined, should be allowed
to be cross-examined by the person whose conduct is
under investigation and thereafter such a person may
be examined by the Commission but not by counsel
appearing for other persons, or even bv counsel for
the Union or by counsel for the Commission.

3.25 It was observed that ('here is nothing either
in the Rules nor in the Act, which supports the
contention. There is not even an indication that such
a procedure is intended to be followed, unless it is
assumed that when conduct is attributed to a person

which may ultimately result in some action to be
taken for impropriety, if the finding of tiie! Coiumis-
sion is accepted, the proceedings before the Com-
mission itself assume the form of a criminal trial. For
such an assumption, there is no warrant.

3.26 It was pointed out that the procedure has to
be devised by the Commission in each case having
regard to the nature of the inquiry to be made; and
rarely there would be any two Commissions, which
would follow the same procedure. There may be. a
case, where no person may be involved directly or
indirectly; but only certain matters are to be investi-
gated by the Commission. There may be cases in
which no person may be named as responsible for,
any impropriety and such persons may have to be
identified and their involvement in the impropriety
determined; there may be other cases in which the
person alleged to be responsible for improper conduct
may be named. In each such case the procedure
would be different and the Commission has to devise
a procedure, subject to the Rules and affording pro-
tection or safeguards provided by the statute to the
persons against whom inquiry may have to be made.
It was also observed that section 8C has no indepen-
dent existence : it merely gives content to the right of
being heard, as given by section 8B. Section 8C
is not intended to restrict the scope of the inquiry
which has to be made by the Commission or to attri-
bute to the inquiry a form different from the normal
form of an inquisitorial proceeding.

3.27 The Commission is obliged to devise a proce-
dure under section 8 of the. Act having regard to the
nature of the inquiry to be made. The procedure,
however, has to be subject to the Rules, which may
be made by the Commission in that behalf. .The
Commission is entitled, however, to regulate its pro-
cedure subject to the basic safeguards provided in
sections 8B and 8C. The Commission has also to
issue, as soon as may be, a notice to every person,
who, in the opinion of the Commission should be given
an opportunity of being heard in the inquiry to furnish

' to the Commission a statement relating to such matters
as may be specified in the notice and that such person
should be required to submit sueji a statement under
clause (3) of rule 5 by an affidavit in support of the
facts set out in the statement sworn by the person
furnishing the statement. Apart from that the Com-
mission has the additional power of calling upon any
person to furnish information on such points or
matters as, in the opinion of the Commission, may
be useful for or relevant to the subject matter . of the
inquiry and the person, so required, is legally bound
to furnish such information.

3.28 The proceedings of the Commission are not
analogous to proceedings in a civil trial or enforcement .
of a civil right or obtaining relief for infringement of
a civil right, nor of a criminal trial in which the
conduct of a person or persons for the commission
or infraction of the law is sought to be investigated.
The function of the Commission is to determine facts
relating to matters of public importance and by adop-
tion of a procedure, which is not adversary in charac-
ter, but inquisitorial in character.

3.29 Under section 5 of the Commissions of In-
quiry Act, the Commission may be invested with
additional powers which are set out in that section.
By section 5(2) the Commission has the power to
require any person subject to any privilege, which
may be claimed by that person under any law for
the time being in force, to furnish information on
such points or matters, as in the opinion of the Com-
mission, may be useful for, or relevant to, the subject
matter of the inquiry and any person, so' required,
shah be deemed to be legally bound to furnish such
information within the meaning of section 176 and

; section 177 of the Indian Penal Code.

3.30 One objection, which was ■strenuously urged
before the Commission by counsel appearing for Smt.
Indira Gandhi in the proceedings before tiie Commis-
sion was that in view of the oath of secrecy taken
by a Minister entering upon his office under clause (4 j
of Article 75, according to the forms set out in the
III Schedule to the Constitution and on that account
Smt. Gandhi was unable to disclose any information
relating to the matters of the State which she dealt
with in the course of her functioning as the Prime
Minister of India till she relegated that office. Article
75,. clause (1), provides that the Prime Minister shall
be appointed by the President and the other Ministers
also shall be appointed by the President on the advice
of the Prime Minister. Clause (4) provides that
before a Minister enters upon his office, the President
shall administer to him the oaths of office and of
secrecy, according to the forms set out for the purpose
in the Third Schedule. The forms of oath of office,
as set out in the Third Schedule are as follows : —

.-.. "I,' A. B. C, do swear * * *

' ;f" that I, will bear true faith and allegiance

to the Constitution of India, as by law
established, that I will uphold the sove-
reignty and integrity of India, that I will

faithfully and conscientiously discharge my
duties as a Minister for the Unipn and that
I will do right to all manner of people in
accordance with the Constitution and the
law, without fear or favour, affection or HI
will."

The form of oath of secrecy for a Minister for the
Union is as follows : —

"I, A s ... do swear * * *

that I will not directly or indirectly com-
municate or reveal to any person or persons
any matter, which shall be brought under
my consideration or shall become known
to me as a Minister for the Union except/ as
may be required for the due discharge of
my duties as such Minister."

3.31 The Commission had ruled that the oath of
secrecy of office taken by a Minister of the Union
does not prohibit a Minister from disclosing the infor-
mation before a Commission of Inquiry especially
when the Central Government has directed the holding
of an Inquiry for the purpose of ascertaining facts
relating to matters of public interest. The Constitution
requires that the Minister shall take an oath of office
but does not provide for any penalty for breach of
such oath. Again, the obligation is not absolute but
is subject to the communication being made or the
information being revealed, as may be required in
the due discharge of the duties as such Minister. In
the view of the Commission, the disclosure of infor-
mation before a Commission of Inquiry held in.
pursuance to a direction of the Central Government
after a person has ceased to be a Minister, d.oes not
amount to a breach of the oath of secrecy of the
Minister concerned.

tsas

CHAPTER IV

4.1 The terms of reference to the Commission are
divided into five heads : The Commission is directed
to inquire into the facts and circumstances relating to
specific instances consisting ■ of —

(i) subversion of lawful processes and well-
established conventions, administrative pro-
cedures and practices, abuse of authority,
misuse of power, excesses and/or mal-
practices committed during the period when
the Proclamation of Emergency made on
June 25, 1975 under Article 352 of the
Constitution was in force or in days imme-
diately preceding the said Proclamation;

(U) misuse of power of arrests or issue of deten-
tion orders where such arrests or orders are
alleged to have been made on considerations
not germane to the purposes of the relevant
Acts during the aforesaid period;

(iii) specific instances of maltreatment of and/or
atrocities on persons arrested under DISIR.
or detained and their relatives and close
associates during the aforesaid period;

(iv) specific instances of compulsion and use of
force in the implementation of the family
planning programme during the aforesaid
period;

(v) indiscriminate, high-handed or unauthorised
demolition, of houses, huts, shops, buildings,
structures and destruction of property in the
name of slum clearance or enforcement of
Town Planning or land use schemes, during
the aforesaid period.

4.2 The inquiry is directed into specific instances
of excesses or malpractices committed during the
aforesaid period. The inquiry is further directed to ex-
cesses of powers of arrests or issue of detention orders;

maltreatment of and/or atrocities on persons arrested
under the Preventive Detention procedures; use of
force in the implementation of the Family Planning
Programme and indiscriminate, high-handed or un-
authorised demolition of houses, shops and structures.

4.3 If the primary activity disclosed in a particular
case falls under a particular head, it will be dealt with
under that head regardless of the fact that the case
discloses some other activities like subversion of law-
ful process or conventions, disregard of administrative
procedures or abuse of authority. For example, where
the excess committed relates to the issue of a detention
order, despite the fact that the excess may have beeri
committed by ignoring the established conventions and
by abuse of authority, the case will be dealt with under
the head "misuse of powers of arrests or issue ol
detention orders". Similarly, where the specific excess
committed relates to the use of force in the implemen-
tation of the family planning programme, even if it
appears that it was by "abuse of authority" or "misuse
of power", it will be dealt with under the head
"Compulsion and use of force in the implementation
of the family planning programme". Similarly, where
there has been indiscriminate, high-handed or unautho-
rised demolition of houses and structures by the abuse
of authority or misuse of power, it will be dealt with
under the head "Unauthorised demolition of houses,
huts, etc."

4.4 Out of a number of cases which came to its
notice by virtue of the complaints made to it or on
the basis of the information developed by the Com-
mission,, the Commission took up for open hearing
only those cases in which it appeared that there had
been a blatant abuse of authority or misuse of powers
'relating to instances falling under one of the five heads
of the terms of reference. In this regard one general
principle which has been kept in mind is that the
excess complained of must be of a nature which would
be capable of creating a crisis of confidence or which
is one of national importance.

■ ■■ ■■.■- ■ :. ■■ ./s w'-'.m^ii

■ .. . - & iiii m

CHAPTER V

In the Elections held to the Lok Sabha in 1971 from
the Rai Bareily Consituency Smt. Indira Gandhi was
"declared elected, defeating Shri Raj Narain and others
who had contested the election. Shri Raj Narain then
filed a petition in the High Court of Allahabad chal-
lenging the election of Smt. Indira Nehru Gandhi on
a number of grounds, inter alia, alleging misconduct
against her. The High Court of Allahabad pronounc-
ed its judgment on June 12, 1975. Shri J. M. L. Sinha
of Allahabad High Court ordered :

"In view of my findings this petition is

allowed and the election of Smt. Indira
Nehru Gandhi respondent No. 1 to the Lok
Sabha is declared void."

The Court further ruled that :

. ' "The respondent No. 1, accordingly, stands dis-
qualified for a period of six years from the
date Of this order, as provided in section SA
of the Representation of the People Act,"

The Court further" directed :

"The operation of the said order is accordingly

stayed for a period of twenty days. On

:■• the: r expky of the said period of 20 days or

.;,. as soon as an appeal is filed in the Supreme

\ : Court, whichever takes place earlier, this'

order shall cease to carry effect."

5.2 Following the judgment of the Allahabad High
Court setting aside the- election of Smt. Indira Gandhi
there was a spurt of political activity m Delhi in parti-
cular and in the rest of India in general.

5.3 Apparently, an effort was made by the follow-
ers of Smt. Indira Gandhi to create an atmosphere that
she should, notwithstanding that she was unseated and
disqualified to stand for election, continue to remain
and function, as Prime Minister of India -regardless of
the High 1 Court verdict. With that object in view,
a number of demonstrations, rallies and meetings were
arranged by her supporters in Delhi and elsewhere.

5.4 The post-judgment scene in Delhi and some of
the adjoining States was spoken to by a number of
witnesses. Shri Bhawani Mai, the then Inspector
General of Police, Delhi, stated that there was no
denying the fact that there had been a spurt of activity
in the wake of the announcement of Shri Justice
Sinha's verdict. Several demonstrations, rallies and
public meetings were organised between June 12 and
25. Most of these were in. favour of the former
Prime Minister, while a few were directed against her,
and all this generated tension but no untoward incident
occurred during that period.

5.5 Shri Kxishan Chand, the then Lt. Governor,
Delhi, stated that soon after the pronouncement of
Allahabad High Court judgment, he was called to the
Prime Minister's House, but lie sent Shri Navin
Chawla, his Secretary, to proceed to the Prime
Minister's House. He stated that he learnt from Shri
Navin Chawla that in order- to cope up with the law
and order situation that might develop from the threa-
tened opposition rallies, it was decided to organise
rallies in support of the Prime Minister; and for this
purpose people had to be collected from various places.
Shri Krishan Chand also stated that he was told that
public utility services would also be mobilised for the
purpose. These services included New Delhi Munici-
pal Committee, Delhi Transport Corporation and Delhi
Electric Supply Undertaking. He further stated that
rallies and Ringing of people to the House of the
Prime Minister continued after the 12th of June in
order to show support to the Prime Minister.

5.6 The records of Delhi Transport .Corporation
show that 1761 DTC buses were requisitioned t\iy the
All India Congress Committee or the Delhi Pradesh
Congress Committee for organising the rallies in 'sup-
port of Smt. Indira Gandhi between June 12, 1975
and June 25, 1975. Shri J. R. Anand, who was
working as a Traffic Manager in Delhi Transport
Corporation (DTC) stated that buses were mostly

■booked on his own orders as the Traffic Manager and
that he did it in pursuance of the decision taken by
the Chairman of the DTC, who was also the Lt.
Governor. The instructions were given in a meeting
held at Raj Nivas that full cooperation should be
given by the DTC by'arranging buses to carry people
who were taking part in rallies to be organised to
express solidarity to the then Prime Minister. Shri J. R.
Anand has stated that according to the DTC Rules
for special hire by a private party, an application in
prescribed proforma accompanied by advance payment
is required; but this formality was not observed in the
case of the bookings made by the AICC. The buses
were booked on the basis of telephonic instructions
received from Shri Navin Chawla, the then Secretary
to the Lt. Governor. In the cases of major bookings,
the details regarding the number of buses and the
parties and places to which they would report, were
given by Shri Navin Chawla. In small bookings, Shri
J. ;R. Anand stated that Shri Navin Chawla told him
to i get in touch with certain Congress leaders for de-
tails. Shri Anand further stated that in the case of
heavy number of buses booked on June 12 and 20,
the buses had to be withdrawn from the scheduled
operations, thus affecting the normal services; that
the number of buses booked during the period June
12 to 25, 1975, on special hire, was much above the
normal booking allowed for private parties, which is
five buses per depot; that the total number of buses
which could be booked was 95 a day which was far

exceeded in the cases of the buses booked by the AICC
and the individual Congress leaders. This adversely
affected the normal operations of the DTC and caused
much inconvenience to the public. Shri J. R. Anand
has also stated that an amount of Rs. 4 lakhs on
account of special hire charges ox the buses is -still
outstanding against the AICC and DPCC for over
two years.

5.7 On June 13, 1975 the entire fleet of 983 buses
plying on the Delhi routes was taken off the rriad and
the buses -were diverted to converge on the Prime
Minister's House, No. 1, Safdarjung Road to register
their support in favour of Smt, Indira Gandhi. Resi-
dents of Haryana, Punjab, Rajasthan and Uttar Prar
desh, which are the States adjacent to Delhi, were
sent in vehicles commandeered by the State authorities
for the purpose, A large majority of those vehicles
did not observe the Route Permits Rules required
under the Motor Vehicles Act; and in many cases
Government vehicles were used for which no payment
was made.

5.8 The records of the DTC clearly support the
evidence of the witnesses that Government employees
were pressed into service for organising these rallies.
A number of buses deputed in connection with these
rallies were- required to report to the Government
servants including some senior officers. The state-
ment of Shri Jaswant Singh, Depot Manager, DTC,
gave the names/designations of such officials, numbers
of buses which were deputed to report to them and
the relevant dates, which are given below : —

Name of the Officer and designation

S.H.O. Police Station, Faridabad .

Smt. Meenaxi Dutfa, SDM

S.P. New Delhi, Parliament Street Police
Station, Shri K.D. Nayar.

S.H.O. Police Station, Gurgaon ,

S.H.O. Police Station, Rai .

Shri Bakshish Singh Gill, Dy. S.P., En-
forcement . . ." ,

Director of Transport ....

Shri B.L. Anand, S.D.M. .

Shri Sareen, Sadar Bazar Police Station

ShriSareen, Dy. Director, Delhi Admn.,
Delhi . .

Shri Hayalan, PA to Chief Secretary, TIP.

PA to Chief Minister, Bihar

Date of
report

No. of
buses

reported

12-6-75

16-6-75

26-6-75 ■

12-6-75

34"

12-6-75

17-6-75

19-6-75

20-6-75

5.9 Rallies were held at New Delhi to register
support for Smt. Indira Gandhi' to continue in office
as Prime Minister notwithstanding the order of the
Allahabad High Court. Government organisations
like Delhi Transport Corporation, New Delhi Munici-
pal Committee and Delhi Electric Supply Undertaking

participated in these rallies. Shri K. D. Nayar, the
then Superintendent of Police, New Delhi, has stated
that he used to visit and supervise law and order
arrangements in the vicinity of the Prime Minister's
House. According to him the participants in these
rallies carried the banners indicating their organisations
and the Unions to which they belonged ; and that the
participants of those rallies used transport belonging
to their organisations for the purpose of participating
in these rallies.

5.10 The statements of Shri B. K. Mital, Assistant
Secretary (Education) NDMC ; Shri S; P. Goel, Assis-
tant Engineer I, NDMC ; Shri Devi Singh, Painter,
NDMC ; Shri Krishan Lai Chaudhary. of the Horticul-
ture Department ; -Shri V, K. Kaushik, A.E.III(E) ;
Shri Chandan Bedhab, President, Workers Union ;
Shri Mohan Singh, Junior Engineer and Shri J. C.
Wadhwa, Senior Clerk, all NDMC employees and
S/Shri Dhan Ram, President of the Employees Union ;
Madan Lai, Senior Vice President, Employees Union
and Dalip Singh, Party Leader, all of Delhi Milk
Scheme have also supported the participation of these
organisations' employees and resources in the pro-Prime
Minister rallies.

5.11 The participation in the rallies was not
confined to Delhi alone. Shri Krishan Chand,
Lt. Governor deposed that

" ....some neighbouring States. like

Haryana, Rajasthan, Western U.P. also sent
contingents for the purpose. All these
arrangements were made under instructions
from the P.M.'s House conveyed through
Mr. Dhawan and the P.M. was kept informed
about the developments from time to time."

5.12 The records of DTC also clearly show that a
number of buses were deputed to make trips outside
the Union Territory of Delhi. Under the Motor
Vehicles Rules, the buses going outside the Union
Territory of Delhi are required to be issued special
permits from the State Transport Authority for this
purpose. (See Rule 9). The Secretary, State Trans-
port Authority, has, however, informed the Coinmis-.
sion by his letter dated November 28, 1977, that

" as per records maintained in this

office no contract carriage permits .were
issued to the DTC for carrying contract
parties outside the Union Territory of Delhi

■ or to any private parties for use of the DTC
vehicles outside the Union Territory of Delhi
during the period from 12th June, 1975 to
25th June, 1975."

According to Shri J. R. Anand, the then Traffic
Manager, a number of buses booked by AICC through
the Secretary to L. G. during this period were also sent
outside the territory of Delhi, and that under the Motor
Vehicles Act route permits had to be obtained for
sending vehicles outside the Union Territory of Delhi,
which was not done in this case ; and that at a high
level meeting at Raj Niwas, it was decided that the.
buses should be sent to the neighbouring districts of
Haryana and U.P. and the instructions to allow the
buses to pass the barriers had been given ; that to
ensure that the buses reached their destinations in the

—f.t.-:::-w ~ . _ " _ 1- . , ,_ _

.19

neighbouring States, the officers of the DTC were also
deployed ■ to accompany the buses ; and that he had
also been assured'by Shri Navin Chawla that the police
authorities and the State Transport, authorities had
been properly briefed and instructed to ensure that
the buses crossed the borders without any route
permits.

5.13 Shri Raj Roop Singh, Inspector, SHO New
Industrial Township, Faridabad, has stated that after
the announcement of the Allahabad High Court judg-
ment, he received a telephonic message from the police
Headquarters, Gurgaon^ that as 'informed by the
Deputy Commissioner, Gurgaon, about 100 DTC
buses would be arriving from Delhi for the purpose of
rallies in favour of Smt, Indira Gandhi ; that he was
told, that the buses would report to the police station
and that on demand from the Labour Inspectors,
Officers of Industries Department and other Govern-
ment Agencies, Shri Raj Roop Singh should permit
them to take the buses with them ; that the police
station started receiving telephonic messages from
various places and the buses were directed to report to
the officers concerned ; that the majority of the buses .
were taken by the officers of the Labour Department
and Industries Department and people from the
factories located in Faridabad were carried to Delhi
on those buses ; that no records were maintained with
regard to the number of buses received or despatched ;
that the police was asked to arrange supply of trucks
or other conveyance, e.g. four wheelers, for carrying
the people to Delhi ; that the police used to ask the
Truck Unions and Transport companies to supply the
required number of vehicles ; that this was done under
the direction ,of the District Magistrate and the trucks
wet'e collected in SDM's court at Ballabgarh, where
the Block Development .Officers (BDOs) or Tehsildars
used to take charge of the vehicles; and that the
Patwaris and Gramsewaks were detailed to take trucks
to the villages and to collect the people from there to
carry them to Delhi.

5.14 Sub-Inspector Khan Chand, SHO Sadar
Police Station, Gurgaon, stated that the SSP Gurgaon
and the senior Civil Officers had also arrived on the
scene and under the directions of senior officers some
buses were sent to the city while others were sent, to
various factories for carrying people to Delhi. Sub-
Inspector Jagdish Lai, SHO Police " Station City,
Gurgaon, has. stated that : — ■

". , The empty trucks passing the road

were also sometime detained and asked to
report at the Tehsil Headquarters for the
purpose BDOs and Tehsii-
dars used to take charge of these vehicles
and detailed the Patwaris, Gramsewaks etc.
for taking these vehicles to villages and
bringing people from there for taking them
to Delhi."

5.15 Shri N. K. Garg, District Magistrate, Rohtak
has stated that on June 12, 1975, Shri Bansi Lai,
Chief Minister, Haryana, rang him from Haryana
Bhawan, New Delhi, round about 10.30 a.m. and
informed him that the Prime Minister had been un-
seated in the Allahabad High Court, judgment, and

desired that truck loads of people, as many as possible
be sent from 2.30 p.m. onwards to the P.M.'s House ;
and that in that connection Shri Garg should contact
the local MLA, Lala Shri Kishan Das who would
muster. the Congress workers and that Bansi Lai had
also directed that the persons should raise slogans ;
that pursuant thereto he immediately got in touch
with Shri Krishan Das and conveyed the whole message
to him and called Shri S. H, Mohan, SSP and asked
him that he should make an effort to get as many
trucks as possible for taking these people to Delhi.
He also stated that he had received a similar message
from Ch. Dalbir Singh, the then Deputy Minister for '
Shipping in the Central Cabinet.

5.16 The statement of Shri Garg is supported by the
statement of Shri S, H. Mohan. Shri M. K. Miglani,
who was then holding the office of the District Magis-
trate, has also, confirmed in his statement the instruc-
tions given by Shri Bansi Lai, the then Chief Minister,
Haryana. According to Shri Miglani, he learnt from
the local leaders that out of 100 DTC buses that had
come to Faridabad factory area omy about 40 buses
load could be sent, whereas the remaining buses had
to return empty because they were unable to muster
enough factory workers for this purpose.

5.17 On June 13, 1975 ;md again on June 18, 1975,
about 800 to 900 employees of^DESU participated in
pio-P.M. rallies outside the residence of Smt. Indira
Gandhi at the call of the Delhi State Electricity
Workers Union. This is supported by Shri S. N.
Srivastava, Chief. Labour Welfare Officer, DESU and
Shri K. P. Saxena, Controller Rajghat Power House.

5.18 Another major rally took place on June 20,
1975, where as many as 497 DTC buses had been
requisitioned by the organisers of the rally as against
the permissible number of 95 buses, which could have
been booked on special hire by private parties on one
single day. Efforts were also made in the State of
Haryana to contribute to the rally and this is seen
from the statements of S/Shri N. K. Garg, District
Magistrate, Rohtak ; S. H. Mohan. SSP Rohtak and
M. K. Miglani, District Magistrate Gurgaon. Accord-
ing to Shri N. K. Garg, District Magistrate, Shri Bansi
Lai had told him that this was a prestigious rally and
a personal and crucial affair. So, the District
Administration should not lag behind in this task.

5.19 The state of affairs in this regard was not

different in the State of Punjab. The Chief Secretary,
Shri R. S. Talwar, has stated that :

"When it came to my knowledge that official
machinery was befog utilised for organising
transport and mustering men and money for
the purpose, I advised the theft Chief,
Minister not to let Government and semi-y.
Government agencies and. their personnel
being used in support of a political struggle
with which they as such were not concerned.
This advice was not liked, nor did it have
much effect and official machinery continued
to be utilised for mobilising men, money and
transport to be sent to Delhi,"

■in.— m m

5.20 According to the records of the Northern
Railway, three special trains were arranged — one each

' .from Varanasi, Lucknow and Kanpur on June 19,
1975, which arrived in New Delhi/Delhi on June 20,
1975. Two of these special trains had been booked
by known Congressmen. The identity of the party
requisitioning the special ex- Varanasi special train
was not available on the file but the special train was
arranged for the Congress delegates. For return
journey two special trains were sent on June 21, J 975.

5.21 From the State of Rajasthan also, according
to the Rajasthan State Electricity Board records, 58
trucks belonging to the State Electricity Board were
ordered by the Chief Minister to be placed at the
disposal of the Workers' Union. Even though the
Chairman of the Electricity Board, Shri Mangal Behari,
had directed that appropriate charges should be made,
but no payment of .hire charges was made either by
the Government or by the Workers' Union.

5.22 On June 22, 1975, the Opposition parties
had organised a rally which was to be addressed by
Shri Jaya Prakash Narayan. This caused considerable
concern in the official circles. This is seen from the
statement of Shri Krishan Chand, Lt, Governor, who
stated that

"Several meetings were also held in the Home
Ministry to consider as to how best the
situation developing from the speeches of
Shri Jaya Prakash Narayan could be dealt
with. At the official level, the view was that
whatever might fee done in respect of other
leaders, Shri Jaya Prakash Narayan's arrest
would make it more difficult to preserve
public peace than if he was not arrested

.This view eventually did not

prevail. However, Shri Jaya Prakash
Narayan could not come to Delhi to address
the meeting at Rarnltla Grounds on June 22,
1975."

5.23 While Government bodies were vying with
each other to show their support to or sympathy for
the Prims Minister by misusing Government resources,
there were Government employees, both highly and
lowly placed, who were not willing to be a party to,
what they thought was wrong and improper in terms
of employment of Government resources for a political
party for partisan purposes. Shri R. N. Bhatnagar of
the NDMC opposed the diversion of the NDMC trucks
from the normal duties to proceed to the P.M.'s House,
and lay in front of a truck of the NDMC. which was
sought to be diverted to proceed to the P.M's House ;
He pleaded that if the employees and the authorities
wanted to signify their support to Smt. Indira Gandhi,
they were welcome to do so but not at the cost of the
civic resources.

5.24 Certain employees of the DESU, who refused
to participate in these rallies, were allegedly beaten up
by the more enthusiastic amongst the supporters of
the Prime Minister.

5.25 Shri Mangal Behari, IAS, the Chairman of the
Rajasthan Electricity Board became the victim of the

wrath of the State Government of Rajasthan as he
had refused to fall in line with the demand for sending
the Electricity Board workers in the Electricity- Board
trucks, free of cost to attend the rally in Delhi arranged
on June 20, 1975 to show support to and solidarity
with Smt. Indira Gandhi. The details of the incident
will be set out hereafter when the Commission deals
with the case of Shri Mangal Behari.

5.26 While the Government resources in Delhi and
elsewhere were being utilised to demonstrate support
in favour of the Prime Minister, the law was also
discriminately applied to the Congress party as against
the other parties. Enforcement of prohibition of
meetings under section 144 of the Criminal Procedure
Code, which had become a ' normal feature in the
vicinity of the Prime Minister's House, was relaxed
when it came to demonstrations and rallies arranged
by the Congress party in support of the Prime Minister.
This matter was reported to the President, who sent
for the Lt. Governor of Delhi and enquired of him as
to why the other parties were not being given the same
facilities as were being given to the Congress party.
The Lt. Governor stated before the Commission that
he had told the President that if the opposition parties
were also directed to have the same facilities, that
would have led to clashes creating a law and order
situation. The Lt. Governor further stated that this
relaxation was made in favour of the Congress party
in the order under section 144 of the Code of Criminal
Procedure at the instance of the then Prime Minister.

5.27 While these demonstrations of sympathy and
support to the Prime Minister were going on apace,
the Intelligence Bureau of the Government of India
was being used to maintain surveillance on the activities
of some of the important Congress leaders and
Ministers. The Commission came across a Top Secret
note dated June 18, 1975, sent by the then Director,
Intelligence Bureau, to the Prime Minister's Secretariat.
It contains matters which among other things could
have been compiled only on the basis of a physical
watch and telephone tappings of the persons concerned.
This raises a very important issue which has relevance
to the assault on the privacy of the individuals and
even of Ministers of Government for purposes which
are other than those strictly necessary for ensuring the
security of the State.

5.28 Shri Jagjiwan Ram, then Minister in Smt.
Indira Gandhi's Cabinet stated before the Commission
that even before the imposition of the Emergency, his
movements were watched and that his telephone was
tapped. This he was able to assert on the basis of
the information, which was furnished to him by the
concerned officials, who owed loyalty to him. He
was very critical of the Intelligence Bureau, who he
said, was feeding the Prime Minister with information-
some correct, some incorrect ■ and some fabricated.
After the imposition of the Emergency, the watch on
him was intensified. Shri Jagjiwan Ram felt very
strongly about the physical watch on the Ministers
and citizens as it was a gross interference with the
riehts of citizens and their individual freedom which
should not be permitted in a democracv. He felt that
this was happening even before the Emergency and
was intensified during the Emergency and according

-^.s ^-•.■■yr^-^---'..-^-

:lV. > rtt:;Ei;:S»jafeyii!iU-,"iJi:Umi-isiiMi_

to him it had not ceased even after the Emergency.
He was also critical of the employment of the Intelli-
gence Bureau for assessing the election prospects of
the Congress, and ascertaining through the Intelligence
Bureau the- suitability of candidates for contesting 'the
election on behalf of the Congress Party. Intelligence
Bureau officer's conducting such inquiries were feci
with misleading information by interested candidates
and in consequence the feed back to the Prime Minister
by the Intelligence Bureau proved equally misleading.

5.29 The decision to take certain drastic steps
including even the declaration of Emergency was,
apparently, in contemplation even as early as June 22,
1975. On June 22, 1975, Shri R. K. Dhawan rang
up'Andhra Pradesh Chief Minister Shri J. Vcngala
Rao, and told him to be available at Delhi on June 24,
1975, when the judgment Of the Supreme Court relating
i to the stay order applied for by Smt. Gandhi pending
decision of the appeal filed by her was expected to be
announced. Presumably, the order which the Supreme
Court would make was to be the deciding factor on
whether the drastic action contemplated to be taken,
should in effect be instituted. If the judgment had
i been in the nature of a categorical and an uncondi- ■
I tional stay, probably no action of the nature, which
was Ultimately taken, would have followed. But the
Supreme Court gave only a conditional order. On
June 24, 1975, Shri Justice Krishna Iyer delivered his
judgment on the appeal of Smt. Indira Gandhi. The
operative portions of the judgment are as follows :

"(i) Subject to paragraph (iii) below there will
be a stay of the operation of the judgment
and order of the High Court under appeal.

(ii) Consequently, the disqualification imposed
upon the appellant as a statutory sequal under
section 8A of the Act and as forming part
of the judgment "and. order impugned will
also stand suspended. That is to say, the
petitioner will remain a Member of the Lok
Sabha for nil purposes except to the extent
restricted by para (iii) so' long as the stay
; ■ ■ lasts.

(iii) The appellant petitioner, a Lok Sabha
Member, will be entitled to sign the register
■ • kept in the House for the purpose and attend
the Session of the Lok Sabha. But she will
neither take part in the pivmeediflga in tins
Lok Sabha nor vote, nor draw a remunera-
tion in her capacity ' as a Member of the
Lok Sabha.

(iv) Independently of the restrictions under para
(iii) on her Membership of the Lok Sabha,
her right as Prime Minister or Minister so
long as she fills that office,, to speak in and
otherwise to take part in the proceedings of
either House of Parliament or attend sitting
of the Houses (without the right to vote)
and to discharge other functions such as are

. . laid down in. the Article 74. 75, 78, 88 etc.

or under anv other law- and to draw salary

as Prime Minister, shall not be affected or

. detracted from on account of the conditions

. . contained in the stay order,"
S/39 HA/77— 4

5.30 Since the judgement was conditional, it appears
to have been decided that the plan of taking drastic
action was to be gone through with expedition and

despatch.

5.31 According to Shri Krishan Chand, the Lt.
Governor, Delhi, even as early as the evening of 23rd,
a decision had been taken to take the Opposition
leaders into custody soon after the Opposition rally,
scheduled for June 24, was held. Lists of the Opposi-
tion leaders, which were to be arrested were also under
preparation.

5.32 It appears from the report dated June 18, 1975,*
of the Director of the Intelligence Bureau, Shri Atma
Jaya Ram that considerable political activity took place
between June 15 and 18. The important aspects of
the political activity were that Shri Krishan Kant,
Shri Chandar Shekhar and Shri Mohan Dharia were
active in putting forth the view that Smt. Indira Gandhi
should step down and that the party should elect a
new leader. Smt. Lakshmi Kanthamma was also of
this view. Shri Krishan Kant pointedly expressed the
view that so long as Smt. Gandhi remained in office
the Opposition would get "a one-line programme" and .
it could snowball into a revolution. Shri Mohan Dharia
was advised by Shri Y. B. Chavan in the afternoon of
June 17 not to raise any dissent in the Parliamentary
Party meeting on June 18. SAShri Chandar Shekhar
and Krishan Kant met Shri Bahuguna on June 17,
1975 at U.P. Nivas. Substantial portions of this report
have not been verified to be correct and some of them
have been denied by Shri Jagjiwan Ram, who made
his statement before the Commission.

Some of the important events between June 23 and
25, 1975

5.33 It was expected that a rally would take place,
headed by Shri Jaya Prakash Narayan on June 24,
1975. In the evening of June 23 an indication was,
given to Shri Krishan Chand, Ll, Governor by Shri
R. K. Dhawan that the Opposition Leaders may have
to be taken into custody after the rally on June 24
and lists of prominent political leaders to be arrested
were prepared by S. P. (CID) at P.M's House. Shri
Krishan Chand stated that he was shown the lists and
that changes were made in the lists and continued to
be made from time to time as a result of continued
discussions at P.M's House, but that he did not see
the final list. He also stated that the Opposition rally
did not take place on June 24 as announced to take
place on that day, and so the action proposed to be
taken on June 24 was stayed.

5.34 On June 24, Shri Justice Krishna Tver
announced the judgment. The Hindi version of the
judgment broadcast over the All India Radio gave the
complete storv- This gave rise to certain angry re-
actions and the Minister spoke to the Director of
News. Within a short time a revised Hindi version
was broadcast which was intended to be favourable to
Smt. Indira Gandhi, as broadcast in the Enfflish bulletin
at 4 p.m. In the meanwhile, the authentic copies' of
the iudgrnent were obtained. According to Shri
Krishan Chand, after the import of the judement was
fully realised, it was' decided to take drastic action

against the Opposition leaders -as soon as there were
tangible signs of any; effort on their part to dislodge
the Prime Minister from her office and it was decided
by the Prime Minister that action would be taken on
June 25 after the Opposition rally.

5.35 On June 24, 1975, Shri J. Vengala Rao
received a telephonic message from Shri R. K. Dhawan
requesting him to meet the Prime Minister on June 25.
Shri Vengala Rao has stated that Smt. Indira Gandhi
informed him that having regard to the prevailing
conditions and the contemplated country-wide agitation,
it had been decided to take strong and deterrent action ;
and as this was sure to cause resentment and there
was a possibility of some violent action, it would be
necessary to take all preventive actions including
arrests of presons who were likely to cause disturbance.
He further stated that he was requested to pass on
the message to the Chief Minister of Karnataka, who
could not be present and ths? both the Chief Minister
of Karnataka and Shri Vengala Rao were asked to be
available on the telephone on June 25 when the final
decision of the Government of India would be com-
municated to them by Shri Dhawan. Shri Vengala
Rao left by an IAF plane, which was specially arranged
for him for making a trip to Bangalore. He stated
that he met the Chief Minister of Karnataka at Banga-
lore, apprised him of what the Prime Minister wanted
him to tell him and in the evening he reached
Hyderabad- by the same plane.

5.36 Shri P. C. Sethi, Chief Minister of Madhya
Pradesh, was told at the residence of the Prime Minister
on the morning of June 25 by Shri Om Mehta, Minister
of State for Home Affairs, about the guidelines that
he would have to observe in taking into evistody certain
persons, who were capable of creating disturbances.
According to Shri P. C. Sethi, it took place in the
presence of the Prime Minister.

5.37 The Prime Minister tried to pet in touch with
Shri Harideo Joshi, Chief Minister of Rajasthan, but
she was unsuccessful in conveying that message to
Shri Harideo Joshi on telephone. Shri Sethi was" then
asked to contact Shri Harideo Joshi at Banswara on
his way to Bhopal and convey the same message to
him. Accordingly, Shri Sethi went to Bhopal via
Banswara by an IAF aircraft. At Bhopal Shri Sethi
took steps in pursuance of the instructions that had
been given to him by the Prime Minister. Shri Harideo
Joshi returned to Jaipur by the same aircraft, which
after leaving Shri Sethi at Bhopal, had come to Bans-
wara for this purpose.

5.38 The records maintained at the Air Headquar-
ters of the IAF confirm the flights of Shri Vengala
Rao, Shri P. C. Sethi and Shri Harideo Joshi by the
IAF aircrafts on June 25, 1975. No payments were
apparently made by anyone for the use of the IAF
aircrafts.

5.39 Shri S. K. Misra, who" was the Principal
Secretary to the Chief Minister, Haryana, has in his
statement before the Commission, stated that between
12 noon and 2 p.m. on, June 25, 1975, he received
from Delhi a telephonic, information from Shri Bansi
Lai, the then Chief Minister of Haryana, asking him

to alert the Deputy Commissioners to remain at their
Headquarters and be available on telephones and also
to reserve huts at Sohna Tourist Complex for two
VIPs, who were to reach there on the night of June
25/26, 1975. Lists of persons to be taken into cus-
tody were to be prepared by A.D.I.G., C.I.D. Shri
Misra met Shri Bansi Lai at about 10 p.m. on his
return from Delhi, At that time the latter told him
that Emergency was expected to be declared that night.
This statement of Shri S. K. Misra is corroborated
by the statement of Shri N. K, Garg, the then Deputy
Commissioner, Rohtak, who had also met Shri Bansi
Lai at Rohtak at about 4,30 p.m.

5.40 Shri M. K. Miglani, who was the Deputy
Commissioner at Gurgabn, had taken steps to reserve
two huts in Sohna Tourist Complex on June 25 in
pursuant to the message received from Shri S. K.
Misra. He also contacted the Lt. Governor of Delhi
and in response to his directions detailed one of his
officers to reach Haryana Bhawan, New Delhi, at
about 10 p.m. on the night of June 25, 1975, where
the Delhi Administration, authorities were to contact
him.-

5.41 The District Magistrate, Darbhanga (Bihar)
had conveyed to the then Chief Minister of Bihar a
message, which he had received from Patna, to the
effect that the Chief Minister of Bihar was to contact
the Prime Minister's House at about 9 p.m. on the
night of June 25. Accordingly, the Chief Minister
contacted the Prime Minister's House and after the
telephonic talk that the Chief Minister had with the
Prime Minister, the Chief Minister is reported to have
told the District Magistrate that he wanted to get back
to Patna the same night by road and he wanted to
know the provisions under the Defence of India Rules
with regard to the Press. The Chief Minister* told
the District Magistrate to convey to the Home Secre-
tary and TGP the desire of the Chief Minister that
they should meet him at his residence at about 2.30
a.m. on the night between June 25/26, 1975.

5.42 According to the statement of Shri Krishan
Chand, all arrangements in connection with the, im-
pending arrests were discussed at a meeting in the
afternoon of June 25 in the room of Shri R. K.
Dhawan in the presence of Shri Om Mehta, the then
Minister of State for Home Affairs, Shri Bansi Lai
and Shri Bajwa, S.P. (CID), Delhi Administration.
Shri Krishan Chand then called a meeting at about
7.30 p.m. at Raj Niwas at which the Chief Secretary,
I.G. Police, Deputy Commissioner, DIG (Range) and
others were present. The Chief Secretary of Delhi
Administration. Shri J. K. Kohli had been instructed
to visit the Tihar Jail to arrange necessary accommo-
dation in the jail for those who would be rounded. up
in the course of the night between June 25/26, 1975
and taken to Tihar Jail. Accordingly, Shri Kohli had
visited the Tihar Jail at about 8.15 p.m. in the night,
checked up the availability of accommodation there
and had tipped off the Superintendent of Jail that he
should be prepared to receive about 200 "Naga
Political Prisoners", by the next. morning.

5.43 Efforts were also made to ensure that some
important newspapers were prevented from bringing

». ".._, '..^kL

out the morning editions on June 26, 1975. Shri B, N.
Mehrdtra, Ex-General Manager, Delhi Electric Supply
Undertaking has stated that he was called to Raj
Niwas by the Lt. Governor at about 10 p,m. and told
that the electricity connections to the Press were -to
be disconnected from 2 a.m. that night and Shri
Krishan Chand said that these were the orders from
the Prime Minister's House and had got to be carried
out. Shri Mehrotra carried out the orders and report-
ed compliance thereof at about 2 a.m. to Shri Navin
Chawla, Secretary to the Lt. Governor.

5.44 Efforts were also made to prevent publication
of newspapers in Chandigarh and Bhopal. Shri N. P.
Mathur, who was the Chief Commissioner at Chandi-
garh, had not received any direct instructions either

.. from the Home Secretary or from any other respon-
sible quarters in Delhi. Shri N. P. Mathur had con-
tacted over the phone on June 25, 1975 the Home
Secretary, Shri S. L. Khurana to obtain confirmation

. of .the instructions of the Chief Minister of Punjab.
Shri Khurana disclaimed any knowledge on the subject,
He, therefore, did not act on the verbal instructions

■ received by him from Shri Zail Singh, Chief Minister
Of Punjab, to lock up "The Tribune" and its Editor,
Shri Madhavan Nair at Chandigarh.

5.45 Initially instructions were issued by the Chief
Minister of Madhya Pradesh at about 9 or 10 p.m.
on June 25, 1975 to the effect that news about the
arrests should not appear in the newspapers of Bhopal
and Other important places.' The same instructions
were subsequently countermanded as testified by Shri
Narendra Prasad, the then S.P., Bhopal.

5.46 It would, therefore, appear clear that in vary-
ing degrees the Chief Ministers of several States were
taken into confidence as early as the morning of
June 25, and they had been instructed to take steps
to take action on receipt of the advice from the Prime
Minister's House that night. Those who had infor-
mation to this effect were the Chief Ministers of
Andhra Pradesh, Karnataka, Madhya Pradesh,
Rajasthan, Haryana, Punjab, Bihar and West Bengal.
The Lt. Governor of Delhi was fully in. the picture
even before June 25, 1975.

5.47 Shri Sidharth Shankar Ray, Chief Minister of
West Bengal, has stated that he received 'a message
from the Prime Minister's Secretariat on the morning
of June 25, and, accordingly, he went to her house.
When she came into the rooni where fte was waiting,
she had some reports in her hand and she stated that
the country was in great difficulty; and that in view
of the all-round indiscipline and lawlessness, she want-

, ed that something should be done. According to
Shri Ray, she had told him on two cr three occasions
prior to this that India required a- shock treatment
and something had to be done and some sort of
emergent power or drastic power was necessary. Shri
Ray, remembered that one such occasion when she
had mentioned about the shock treatment was some-
time before the announcement of Allahabad judgment
on June 12, 1975- On this occasion he had told her
that they could manage with the laws, which were
already on the statute books. In this context he had
also mentioned the success with which they had tackled

the law and order problems of West Bengal within
the framework of the laws then in force. According
to Mr. Ray, the reports that she read out indicated
that there was lawlessness or threats of lawlessness in
many parts of the Northern India; that while they were
discussing, a bearer came in with a piece of paper
from which she read out and said that this was a
report giving advance information about what Shri
Jaya Prakash Narayan was going to say at a public
meeting scheduled for that day in Delhi; that Shri
Jaya Prakash Narayan would be calling for a mass
movement within two or three days ail over India and
that the usual things would be said by him; such as,
parallel administration, parallel courts, students not to
join Universities,. Schools and Colleges; appeal to
policemen and to armed forces not to obey what were
supposed to be illegal orders etc. Shri Ray said that
he did not know from where this report originated.
According to Shri Ray, there were certain things, which
when they came from the Prime Minister, he could
not say that they were totally wrong, particularly if
they were factual; but, according to him, she was
firm on the factual aspect that those reports indicated
that India was drifting towards chaos and anarchy.
Shri Ray then stated that he told her that he would
like to consider the steps that had to be taken, after
consulting the relevant literature on the subject ; that
she gave him the impression that she was seriously
and sincerely disturbed with the conditions prevailing
in the country; and that he asked for some time to
consult the relevant law and left the Prime Minister's
house; that he came back at about 4.30 or 5 p.m. and
told her that she could consider if she so desired,
Article 352 of the Constitution for the purpose of
imposing internal Emergency; and thereupon she ask-
ed Shri Ray to go along with her to the President
immediately. The President was then contacted and
an appointment was taken and she went to the Presi-
dent along with Shri Ray. She gave to the President
a summary of what she had told Shri Ray with regard
to the facts; that the President heard her for about
20 minutes to half an hour and then asked Shri Ray
as to what were the exact words in the Constitution;
that the President then told the Prime Minister to
make her recommendation; and when she was return-
ing with him from the President's house, he told her
that she should involve the other leaders also in that
decision; that though he did not name anyone in par-
ticular, except the name of Shri Dev Kant Barodah,
who was the President of the Indian National Congress,
he wanted that she should involve the other leaders
and talk to them about this matter; that she wanted
to know the answers to three questions, which she
had raised :

"Firstly, she wants to take a decision without
going to the Cabinet. Ts it possible ? Can
it be done ?
Secondly, what should be the language of the

letter to be addressed to the President?
Thirdly, what should be the text of the Procla-
mation ?"

Shri Ray thereafter consulted the Business Rules and
a notification pertaining to proclamation of Emergency
in 1971. According tb Shri Ray the first category
dealt with matters, which must go to the_ Cabinet; fhe
second category dealt with matters, which need not

go at all to the Cabinet; and the third category dealt
with matters which could be dealt r with by the Prime
Minister, but had to be ratified by the Cabinet. Smt.
Gandhi said that she wanted to take the decision her-
self and that she would call a meeting of the Cabinet
early next morning. Shri Ray then told her that it
she wanted to take the decision herself, she should
write recommending to the President the proclamation
o£ Internal Emergency and avail herself of the relevant
Rules, as provided in the third category of the Business
Rules. ■ Shri. Ray prepared two drafts. According to
him, the letter, which Smt. Gandhi had written to the
President recommending the proclamation of the
Emergency and which was published subsequently in
the proceedings of the Commission, was not the draft
which he had made on the subject and given to the
Prime Minister. According to Shri Ray, Shri Barooah
was also called in later in the evening and his advice
was sought by Smt. Gandhi as to the kind of speech
she should make on the radio announcing the procla-
mation of Emergency. Smt. Gandhi, Slid Barooah and
Shri Ray worked over the speech and this exercise
took a long time — perhaps about three hours. This
was because Shri Sanjay Gandhi used to come into the
room and ask his mother to come out. Smt. Gandhi
would then go out and not return for 5 to 10 minutes,
and what she did when she went out, Shri Ray did not
know. After finishing the speech writing, when he
was going out through the door of the room, Shri Ray
heard to his surprise from Shri Om Mehta that orders
had been passed to loek-up the High Courts, the next
day and to cut off the electricity connections to alJ
newspapers. Shri Ray was surprised because he had
told her "that under the Emergency one could not
take any action unless rules were framed, Shri Ray
said that the locking up of the High Courts and cutting
off of electricity connections could not just happen and
he told that to those ■ who were present there. He
stayed on and wanted to see Smt. Gandhi and convey
to her iiis reactions. He said that he would not leave
unless and until she saw him because what was hap-
pening was important. Smt. Gandhi was late in com-
ing and while he was waiting Shri Sanjay Gandhi met
him in a highly excited and infuriated state of mind
and told him quite rudely and offensively that he did
not know how to rule the country. Shri Ray did not
lose his temper but made him understand that he
should mind his own business and should not try to
interfere with what was not his sphere. Later Smt.
Gandhi came and he told her about the impending
closure of- the High Courts and cutting off of electri-
city connections to newspapers. Smt. Gandhi immedi-
ately said that this should be stopped.

5.48 Shri Om Mehta in his deposition before the
Commissior, has stated that he had given information
to Shri Ray in the Prime Minister's house that nteht
regarding the intended closure of the courts and cutting
off of electricity, which had come to his knowledge
while he was waiting in one of the rooms of the Prime
Minister's house on that night.

5.49 Shri Brahmananda Reddy, the then Home
Minister, has said in his statement that he was called
to the house of the Prime Minister at about 10.30 p.m.
and was told that on account of the deterioratinji law

and order situation it was felt necessary to impose
Internal Emergency. He told Smt. Gandhi that there
was already an Emergency on and that the powers
already available under the existing Emergency could
be availed of to deal with the situation. Thereafter,
he left, but he was sent for again a little later and he
was told by Smt. Gandhi that his earlier suggestion
had been examined and it was found that the declara-
tion of Internal Emergency was considered necessary.
Shri Brahmananda Reddy thereupon told her to do
what she thought was best. He has stated that on
this occasion he also signed a letter to the President
of the Republic making reference to the telephonic
conversation which the then Prime Minister had with
the President and appended the draft proclamation of
Emergency for the President's assent along with his
letter. The letter signed by Shri Brahmananda Reddy
was on a plain sheet of paper and was not on a sheet
with the letter-head of the Home Minister of India.

5.50 Shri Akhtar Alam, who functioned ate the
Special Assistant to the President of India, has stated
that an important letter from the Prime Minister's
house was delivered to him at about 10.30 p.m. on
June 25, 1975, and that he delivered it to the Presi-
dent, who sent for his Secretary, Shri K, Balachandran
and also Shri Ncelkanlhan, Deputy Secretary, who dealt
with such letters. Some discussion ensued, between the
President and the Secretary about the wording of the
letter about which Shri Balachandran raised certain
doubts. At about 11.20 p.m., Shri Dhawan came and
he brought with him some papers. He says that he
did not know what the papers were and he did not
know whether the President signed those papers. The
next morning at about 10.30 or 11 a.m. Shri Akhtar
Alam was given by the President the letter from the
Prime Minister and he kept it in his custody till he
handed it over to Shri Balachandran when Shri Akhtar
Alam left the post in February, 1977.

5.51 Shri K. Balachandran in his deposition has
referred, to the top secret letter received from the
Prime Minister Smt. Indira Gandhi to the President.
This letter referred to the discussion which the Prime
Minister had with the President earlier in! the day.
She had stated that the President was satisfied on the
score of the imminent danger to the security of India
due to internal disturbances. She had also stated that
if the President was satisfied on this score, a procla-
mation under Article 352(1) of the Constitution had
become necessary; and that she was enclosing a copy
of the draft proclamation for the Presidents consi-
deration. Shri Balachandran has stated that there was
no draft proclamation enclosed with the letter. Accord-
ing to Shri Balachandran the Prime Minister had also
stated that she was not consulting the Cabinet due to
shortage of time and the matter was urgent; and that
she was, therefore, permitting a departure from the
Transaction of Business Rules in exercise of her
powers under Rule 12 thereof. According to Shri
Balachandran he had advised the President that it-
would be Constitutionally impermissible for him to
act in the manner suggested in that letter; and that he
had to act on the advice of his Council of Ministers;
and, therefore, his personal satisfaction in this matter
would not arise. The letter from the Prime Minister

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indicated that the Cabinet had not considered the
matter. Moreover, it was worded in such a manner as
would make it appear that the decision to declare
Emergency was that of the President based on his
personal satisfaction. The President, apparently, saw
the force of this argument and contacted the Prime
Minister on the telephone immediately thereafter.
Afterwards, he left the President's room, and came
back after about 10 minutes. In the' intervening brief
period, Shri Dhawan had, visited the President and
had delivered the draft of the proclamation of Emer-
gency for his signature. The President told him that
he had signed the proclamation and given the same to
Shri Dhawan, who had taken it back, with him along
with the Prime Minister's letter. The next day Shri
Akhtar Alam had told Shri Balachandran over the
telephone that a revised letter had been received Irom
the Prime Minister, which was subsequently passed
on to him by Shri Akhtar Alam in February 1977,
and he kept it in his file.

5.52 The Prime Minister's letter and the procla-
mation of Emergency which are available in the
President's office file are reproduced below: —

"TOP SECRET
PRIME MINISTER

INDIA

NEW DELHI June 25, 1975.

"Dear Rashtrapatiji,

As already explained to you, a little while

ago, information has reached us which indicates

that there is an imminent danger to the security

, of India being threatened by internal disturbance.

. The matter is extremely urgent.

"I would have liked to have taken this to
Cabinet but unfortunately this is not possible to-
night. I am, therefore, condoning or permitting
a departure from the Government of India
(Transaction of Business) Rule 1961, as amend-
ed up-to-date by virtue of my powers .under Rule
12 thereof. I shall mention the matter to the
Cabinet first thing tomorrow morning.

"In the circumstances and in case you are
so satisfied,' a requisite Proclamation under Arti-
cle 352(1) has become necessary. I am enclos-
ing a copy of the draft ' Proclamation for your
consideration. As you are aware, under Article
352(3) even when there is an imminent danger
of such a threat, as mentioned by me, the neces-
sary Proclamation under Article 352(1) can be
issued.

"I recommend that such a Proclamation
should be issued tonight, however, late it may be,
■ and all arrangements will be made to make it
public as early as possible thereafter.

With kind regards,

Yours Sincerely,
(Sd/- Indira Gandhi)"

"PROCLAMATION OF EMERGENCY

In exercise of the powers conferred by Clause
1 of Article 352 of the Constitution, I, Fakhruddin
Ali Ahmed, President of India, by this Proclama-
tion declare that a grave emergency exists whereby
the security of India is threatened by internal
disturbance.

New Delhi— 25th June, 1975.

PRESIDENT"

5.53 On the basis of the svidence it is clear that .
some of the important functionaries in the Home
Ministry, Cabinet Secretariat and the Prime Minister's
Secretariat, who should have been consulted before
such an important decision was taken, did not know
anything about the proclamation of Emergency till
Very late and some of them learnt about it only on
the morning of June 26, 1975.

5.54 Shri P. N. Dhar, Secretary to the Prime
Minister, in his statement has said that he knew about
it only when he was called to the Prime Minister's
House around 11.30 p.m. on June 25, when he was
given for perusal the draft of the speech that the Prime
Minister was going to make over the All India Radio.

5.55 Shri B. D. Pande, the Cabinet Secretary, recei-
ved a phone-call from the Prime Minister's House at
about 4.30 a.m. on June 26, and was told that a
Cabinet meeting was scheduled to take place at 6 a.m.
that morning. He knew about the proclamation of
Emergency for the first time that moiuing only. He
was surprised as to how and who functioned to bring
about the large number of arrests Which had taken
place between 25th and 26th June, Normally, all
instructions for such .expeditious actions were routed
through the Ministry of Home Affairs which used then-
own channels of communications.

5.56 According to Shri B* D. Pande, the need
for the declaration of emergency or the situation in
the country warranting any such declaration had not
figured in any of the Cabinet meetings preceding
June 26, 1975.

5.57 Shri Atma' Jayaram, Director, Intelligence
Bureau, has stated that he learnt about the proclama-
tion of Emergency only after he went to the office on
June 26th.

5.58 Shri S. L. Khurana, who was the Home Secre-
tary to the Government of India, had known about it
only when he attended the Cabinet meeting on 26th
morning for which he received intimation past 6 a.m.
Accordingly, he arrived at the Cabinet meeting only
around 6.30 a.m. when the meeting was already on.

5.59 Shri H. R. Gokhale, former Minister of Law
and' Justice, came to know about the proclamation of
Emergency' for the first time at the Cabinet meeting
held on the morning of June 26, "1975. Neither he
nor his Ministry was consulted with regard to the
proclamation of Emergency at any time before, nor
was the proclamation vetted by him or by his Ministry.

5.60 Some of the special features of the proclama-
tion of Emergency, as gathered from the official re-
cords, are as follows : —

(a) on the economic front there was nothing
alarming. On the contrary, the whole-sale
price index had declined "by 7.4 per cent
between December 3, 1974 and the last
week of March. 1975 as per the Economic
Survey 1975-76, a Government of India
Publication;

(b) on the law and order front, the fortnightly
reports sent by the Governors of various
States to the President of India and by the
Chief Secretaries of the States to the Union
Home Secretary indicated that the law and
order situation was under complete control
all over the country;

(c) the Home Ministry had received no reports
from the State Governments indicating any
significant deterioration in the law. and order
situation in the period immediately preceding
the proclamation of Emergency;

(d) the Home Ministry had not prepared any
contingency plans prior to June 25, 1975,
with regard to the imposition of internal
Emergency;

(e) the Intelligence Bureau had not submitted
{< : any report to the Home Ministry any time

:-,?, between 12th of June and 25th of June,
•!■ 1975, suggesting that the internal situation

in the country warranted the imposition of
internal Emergency;

(f) the Home Ministry had not submitted any
report to the Prime Minister expressing its
concern or anxiety about the internal situa-
tion in the country. Till after the Emergency
was lifted, the Home Ministry did not have
on its file the copy of the communication
which was sent by the Prime Minister to
the President recommending imposition of
the Emergency;

(g) while the Director of Intelligence Bureau,
the Home Secretary, the Cabinet Secretary

. and the Secretary to the Prime Minister had
not been taken into confidence, Shri R, K.
Dhawan, the then Additional Private Secre-
tary to the Prime Minister had been asso-
ciated with the preparation and promulgation
of the Emergency right from the early
stage;

(h) Shri Om Mehta, the then Minister of State
in the Ministry of Home Affaire, appears to
have been taken into confidence much earlier
than the Home Minister, Shri K. Brahma-
nanda Reddy, who came into the picture
only when the draft proclamation was
forwarded to the President;

(i) while the Lt. Governor of Delhi and the
Chief Minister of Haryana, Punjab, Madhya
Pradesh, Rajasthan, Kamataka, Andhra
Pradesh, Bihar and West Bengal had been
given advance intimation by the Prime

Minister about the contemplated action, no
such, advance information was given to the
Governments of U.P., Maharashtra, Gujrat,
Tamil Nadu, J&K, Tripura, Oi'issa, Kerala,
Meghalaya and other Union Territories. In
tact, Shri H. N. Bahuguna, the then Chief
Minister of Uttar Pradesh has stated, in his
affidavit that he came to know about the
.proclamation of Emergency on the morning
of June 26, when he was having break-fast
along with Shri Uma Shankar Dikshit and
Shri Xeshav Deo Malaviya, the Central
Ministers, and they . were as surprised as he
was about the promulgation of Emergency.

■5.61 As stated earlier, a notice under rule 5(2)(a)
of the. Commissions of Inquiry Rules was issued to
Smt. Gandhi requesting her to file her statement in
terms of rule 5{3). No such statement was filed by
her. Smt. Gandhi was also issued a summons under
section 8B of the Commissions of Inquiry Act. Though -
she responded to the summons under section 8B of
(he Act, she declined to take oath and give evidence
on oath when the Commission desired to examine her
under section 5(2) and according to the procedure
analogous to the provisions of the Civil Procedure
Code. But iu one of the letters addressed by her to
the Commission, dated November 21, 1977, in res-
ponse to the invitation which was initially extended
to her to assist the Commission, Smt. Gandhi had
submitted a detailed reply to the Commission in regard
to certain matters and, inter alia, raising certain
objections to the procedure adopted by the Commission.
In the course of her reply, she touched on the subject
of declaration of Emergency and stated :

"I should further like to point out that the terms
of reference of this Hon'ble Commission
are one-sided and politically motivated.
While they empower the Hon'ble Commis-
sion to enquire into the excesses committed
during the emergency, they are silent about
the circumstances which led to its declarar
tion. This country is vast and beset with
deep-rooted and wide-ranging problems,
The administrative machinery is fragmented.
Urgent measures have to be taken. Pro-
grammes are implemented at various levels
and by different individuals and < agencies.
Some excesses in their implementation can-
not always be avoided nor do they always
come to notice at that time. I have publicly
expressed regret for any unjust hardship
caused to any individual. But if the pro-
fessed purpose of the inquiry is to check
abuse of power in the future, it is equally
imperative that the circumstances which
created chaotic conditions in the nation before
the emergency should also be enquired into
and not allowed to be repeated. For two ,
years preceding the emergency the country
was in the grip of grave crisis. The econo-
mic situation had deteriorated due mainly to
internal and international causes beyond our
control. Interested parties and groups wished
deliberately to aggravate the situation for
their own gain. Freedom of speech and
expression were used to spread hatred and

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parochial regional sentiments. Noble insti-
tutions of learning were turned into hot-beds
of political intrigue. Public property was
destroyed at the slightest excuse. A Minister
in the present cabinet is reported to have
proudly claimed, "la November last (1975)
in the Union State of Karnataka alone, we
caused derailment of 52 trains". The attempt
was to paralyse national life. The dissolu-
tion of the Gujrat Assembly was forced by
undemocratic means. Duly elected legislators
were beaten and intimidated into resigning
from their seats in the Assembly.

"Relying upon the judgment of the Allahabad High
Court, the demand for my resignation was
made in the name of democracy and mora-
lity. But what was that morality and how did
democracy come in ? If at all, moral consi-
derations were on my side as nothing had
been found by the High Court against me
which smacked of moral turpitude. I had
lost on a legal technicality but law also gave
me the right to reconsideration of the judg-
ment by the highest court. And the act of
seeking to remove a duly elected leader of
the majority party through threats to gheraO
me and with a call to the Army and the
Police to revolt could not be justified in the
flame of any known democratic principles.
A chaotic state of affairs similar to that in
India before July 1975 prevailed in France
when de Gaulle came to power in 1958.
His major response was constitutional reform
and the introduction of Article 16 in the
new Constitution which goes a long way to
show how necessary it became for my govern-
ment to resort to the emergency provisions
.in the Constitution if India were to pull
: - herself out of the impending disaster. The
flew Article provided inter alia that "when
the regular functioning of the constitutional
governmental authorities is interrupted, the
President of the Republic shall take the
measures commended by the circumstances"
to restore order.

"It must also be borne in mind that it would be
impossible for a democratically elected
government to function effectively if it is to
live under the fear of politically . insrnred
inquisitorial proceedings against its policies
and decisions by a subsequent government."

.5.62 Smt. Gandhi sent yet another reply dated
December 2, 1977, in response to another invitation,
which was extended to her by the Commission when
the case dealing with the circumstances leading to the
declaration of Emergency was coming, up for the First
Stage of its hearing before the Commission from
December 5, 1977 and the following days. The relevant
portions of her reply are reproduced below :

"In fact, that the declaration of Emergency,
according to this Hon'ble Commission,
might be an excess and, therefore, calls for
an inquiry, is a matter which does not fall
within the purview of this Hon'ble Com-
mission. The proclamation of Emergency

by the President was a Constitutional step.
It was approved by the Cabinet and duly
ratified by both Houses of Parliament in
terms of Article 352(2) of the Constitution.
After the ratification, the proclamation which
was political in character, became an Act
of Parliament. , In the United States the
exercise of political power by the President
has been held to be beyond challenge. Chief
Justice Marshall observed in Marbury v.
Madison :

"By the Constitution of the United States the
President is invested with certain impor-
tant political powers in the exercise of
which he is to use his own discretion, and
is accountable only to his country in his
political character and to his own cons-
cience The Subjects are

political. They respect the nation, not
individual rights, and being entrusted to
the Executive, the decision of the Executive
is conclusive.''

"Under the Indian Constitution, on the other hand,
the proclamation of Emergency has been
made subject to ratification by parliament.

No authority in this country, not excluding any
commission appointed under the Com-
missions of Inquiry Act, can sit in judgment
over such an Act of Parliament. For any
political decision, the Government under our
Constitution is answerable only to Parlia- .
ment. Jf this Hon'ble Commission arrogates
to itself the power to determine that the.
declaration of Emergency was an excess,
this Hon'ble Commission will not only be
stultifying the Constitutional Scheme, but'
also establishing a precedent which will make
serious inroad into Parliamentary supremacy
with disastrous consequences to Parlia-
mentary freedom. Even the terms at
reference of this Hon'ble Commission do not
warrant such an inquiry. They are strictly
confined to the determination of ""alleged
excesses during the emergency or in the days
immediately preceding it;

But apart from this, I should like to bring to the
notice of the Hon'ble Commission that while
making its pronouncement on my submission
that the terms of reference were one-sided
and politically motivated and that it was
equally imperative that this Hon'ble Com-
mission should go into the circumstances
which led to the declaration of Emergency,
this Hon'ble Commission observed as
follows:

'But one thing I propose to bring to the notice,
I am only concerned with the declaration
of Emergency, if it amounts to an excess
and not otherwise. If on consideration of
the material before me, I am prima facie
of the view that declaration of Emergency
could be regarded as an excess, an inquiry
in open will te made. If, however, there
is nonsuch view formed by me, no such
inquiry will be made.'

"This observation of the Hon'ble Commission,
I most respectfully submit, is not sustainable.
In the first place it is tantamount to saying :
There shall be an inquiry into the declaration
of Emergency if I can be damned in the
process, but there shall be no inquiry if others
whose actions justified the declaration of
Emergency, .are lively to- be damned.
Secondly, it is difficult to imagine how this
Hon'ble Commission can take any decision
regarding the declaration of Emergency with-
out full consideration of the range of circum-
stances and incidents which had accumulated,
for a long time preceding the proclamation,
into an imminent threat to paralyze duly
elected Governments at the Centre and in
the States.

During that period, ostensibly the attacks were
concentrated upon me. In reality the politi-
cal opposition had' been using this strategy
to weaken the Central Government and
subvert its socialist and progressive pro-
grammes for quite some years, It was a
question of change versus the status quo.
Secular, democratic socialism on the one
hand and retrograde, communal and capi-
talistic forces on the other had been struggling
against each other to gain the upper hand.
The split in the Congress in 1969 gave an
edge to this confrontation. The nationalisa-
tion of banks and other measures which
disturbed entrenched privileges and vested
interests, and offered opportunity and help
to the poor and weaker sections of our
society, created such tremendous popular
upsurge that communal and capitalistic
elements probably lost all hope of being able
to successfully fight on an ideological plane.
Hence they changed their methods. Similar
such political phenomenon was not peculiar
to India. Recent history is replete with such
instances.

The vicious campaign of character assassination
and denigration waged by political opponents
denuded Indian politics of all ideological
debates. Even, in the 1971 Lok Sabha
elections, the opposition did not put forth
■ any alternative economic or social pro-
gramme. I was the focus of attack as the
first target. Ordinary human decency was
lost in the process. Their decisive defeat
at the polls frustrated their faith in the
democratic process. There was then a short
interlude durine which India faced one of
the gravest challenges with which any nation
has been confronted. The influx of ten mil-
lion refugees from Bangladesh,- aggression
and the subsequent war, unprecedented
country-wide drought and the ajobal infla-
tionarv spiral aggravated by the oil crisis,
■ and other factors would have upset the eco-
nomic balance of anv rich and developed
country. ^ India was fiehfins for her econo-
mic survival. Tt was durine this period that
the then Opposition resorted to extra-consti-
tutional means' tp paralyse' our democratic

institutions. As I have explained. in my pre-
vious statement, there was hardly any sphere
of national life which was not sought to bs
disrupted.

The inevitable distress of many sections of our
people was exploited to mount attacks
on duly elected Governments and Assemblies
of the day. We cannot forget the tragic
circumstances leading to the dissolution of
the Gujrat Assembly only a few months
after its constitution.

It was in this political atmosphere prevailing in
the country that the judgment of the Allaha-
bad High Court was delivered and was seized
upon by the opposition to whip up political
frenzy against me. Although I was in the
immediate target, the real design was to
dislodge the Congress Government and to
capture power through extra-constitutional
means. If a duly elected Government can
be allowed to be pulled down by threats of
violence and demonstrations in the streets
and by incitement of the army and the police
to revolt, the democratic structure of the
nation would collapse. Tn 1958, while
putting the case for constitutional reform the
French Prime Minister, M. Gallard said,
"Democracy is only in consequence an
anarchy if those who hold power by the
will of the majority do not also enjoy an
authority corresponding to the responsibilities
which they assume."

"As Prime Minister of the country I could not
abdicate my responsibility to stem the
impending disaster merely for fear that my
motive in proclaiming the emergency could
be suspected. When the democratic institu-
tions of a nation are held to ransom, and the
Government of the day rises to the occasion
to meet the challenge, certain freedoms of
some individuals might be affected. That
in fact is the rationale behind Article 352 of
the Constitution which authorises the decla-
ration of Emergency, Emergency was not
intended to cause suffering and I have
expressed deep sorrow for any. hardship
caused.

It may not be out of place to draw the attention '
of this Hon'ble Commission to the present
Prime Minister, Shri Morarii Desai's recent
. observations in the Rajya Sabha that there
was "nothing like absolute right to anybodv."
. "Every rieht is subject to the right of the
whole society. If the rights of the whole
society are in danger, the Government As
bound to take action to prevent that danger."

In these circumstances, the Hon'ble Commis-
sion's predetermination of certain dates
while circumscribinfi; the scope of its inquiry,
belies reality. It has been repeatedly pro-
claimed by members of the present Union
Government that it was aljeeedlv because of
the Allahabad High Court Judgement of the
12th June, 1975. and the Qualified stay given
by the Supreme Court on 22nd of June, that

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the Emergency was declared for personal
reasons, namely, to stultify the judgment by
extra-legal means and to maintain my posi-
tion as Prime Minister by extra-constitutional
methods. I have to point out, with utmost
respect, that the Commission appears Lo
have projected the theory propagated by my
political opponents.

By putting the inquiry beforehand into a prede-
termined chronological matrix the evidence
would naturally proceed under the condi-
tioning of this predetermined matrix, and
this untested material will be systematically
publicised to make it appear as proof. . This,
in my humble opinion, directly defeats the
ends of justice."

5.63 In response to the Commission's inquiry, the
Cabinet Secretariat has brought to the notice of the
Commission the relevant portions of the Government
of India (Transaction of Business) Rules, 1961. Rule 7
of these Rules reads as follows :

"All cases specified in the Second Schedule to
these Rules shall be brought to the Cabinet,"

5.64 Clause (da) of the Second Schedule of ' the
Government of India (Transaction of Business) Rules,
1961, reads as follows :

"(da) — Cases relating to a proclamation of emer-
gency under Articles 352 to 360. of the
Constitution and other matters related
thereto."

5.65 In the light of the foregoing rule, it is not
understood how this provision could have been circum-
vented by the application of Rule 12 of the same
Transaction of Business Rules. Rule 12 of the Govern-
ment of India (Transaction Of Business) Rules reads
as follows :

"12. Departure from Rules : The Prime Minister
may, in any case or classes-of cases, permit
or condone a departure from these rules to
the extent he deems necessary."

5.66 s In this context,, the following information
furnished by the Cabinet Secretariat regarding the
Transaction of Business is relevant to the issue :

"The business of the Government is transacted in
accordance with the Transaction of Business
Rules and the Allocation of Business Rules,
both of which have been promulgated under
Article 77 of the Constitution. The Alloca-
tion of Business Rules provide that the
business of the Government shall be transact-
ed in the Ministries, Departments, Secre-

. ■» tariats and Offices specified in . the First

Schedule to these rules. The distribution of
subjects among the departments is specified
in the Second Schedule to these rules. While
the President can, on the advice of the
Prime Minister, change the allocation of
business between departments, nothing in the
rules seems to provide for the Prime Minis-
ter's Secretariat transacting any business
allotted to a particular Ministry.

S/39 HA/77— 5

By virtue of entry 27 under the Home Ministry,
matters relating to the emergency provisions
of the Constitution (other than financial
emergency) are to be dealt in the Home
Ministry. This, read with Rule 3 of the
Transaction of Business Rules, therefore,
requires that all business pertaining to the
emergency provisions shall be transacted in
the Home Ministry, with cases relating to
the proclamation of Emergency being
brought before the Cabinet.

The normal procedure for submissiort of cases to
the Cabinet is for the Ministry concerned to
send a Note for the Cabinet to the Cabinet
Secretariat. This note contains the proposal
needing Cabinet approval and should have the
approval of the Minister concerned. There-
after the item is placed before the Cabinet and
approval, if accorded, is conveyed to the
Ministry by the Cabinet Secretariat. If time
is short, the Cabinet Secretariat obtains the
approval of the Prime Minister under Rule 12
of the Transaction of Business Rules, and
thereafter authorises the Ministry concerned
to proceed further in the matter."

"Since the Home Ministry has allotted the work
relating to the Emergency provisions of the
Constitution, proposals relating to the pro-
clamation of Emergency should normally
originate from that Ministry. This would be
particularly so when the Emergency is -to be
declared on grounds of internal disturbances,
as the Home Ministry deals With the Intelli-
gence Bureau, Preventive detention and
National Integration. It is the Home Ministry
which is in touch with the State Governments
on matters relating to law and order. The
Cabinet Secretariat did not. however, receive
any proposals from the Home Ministry in
respect of the Proclamation issued on the
25th of June."

5.67 It may be pointed out that even in 1971
when a war was being waged with Pakistan, a pro-
clamation of Emergency* was issued without invoking
Rule 12 of the Transaction of Business Rules. A
regular meeting of • the Council of Ministers was
convened and the -Proclamation was issued thereafter,
after obtaining clearance, from the Home Ministry.
The Cabinet Secretariat conveyed to the Home Ministry
the authorisation to issue the proclamation. Thereafter,
the Presidential proclamation was issued.

5.68 The circumstances leading to the declaration
of Emergency pursuant to the advice of the Prime
Minister leave little room for doubt that the decision
to impose Emergency, when there was already in exist-
ence an Emergency proclaimed as early as 1971, was
exclusively the decision of the Prime Minister. None
of her Cabinet Ministers, except Shri Brahmananda
Reddy was even aware of the proposal to advice the
President pursuant to which a declaration of Emergency
was to be made. Even Shri Brahmananda Reddy„
Home Minister, was not consulted; but he was merely
informed shortly before the advice was tendered and

his ^assistance was taken only for - obtaining a letter
from 1 him intimating tie decision of Smt. Gandhi and
for forwarding the draft Proclamation to the President,
pursuant to which the declaration of Emergency was
issued. This assistance of Shri Brahmanauda Reddy
appears to have been taken only as a matter of form
and merely because his assistance was perhaps required
to formally forward the draft Proclamation to the
President.

5.69 It is necessary, however, to say -something
about the Internal Emergency, which was declared.
Under Article 352, as it stood on the relevant date,
"(1) If the President is satisfied that a grave emer-
gency exists whereby the security of India or of any
part of the territory thereof is threatened, whether by
war of external aggression or internal disturbance, he
may, by Proclamation, make a declaration to tfiat
effect". The condition on which an Emergency may
be proclaimed is : the satisfaction of the President that
emergency exists whereby the security of India or any
part of the territory of India is threatened, whether
(a) by war, or (b) by external aggression, or (c) by
internal disturbances. The satisfaction may be based
on any one or more of the three grounds. The decla-
ration of Emergency by the President has no different
effect according as the satisfaction of the President
depends upon the existence of the State of war or of
external aggression or of internal disturbance. Once
a declaration of Emergency is made on satisfaction
of one or more of the grounds, the consequences des-
cribed by Articles 353 and 358 come into operation.
It is open to the President to declare that the right
to move the court for enforcement of any of the rights
conferred by Part III of the Constitution as may be
mentioned in the order shall remain suspended for
the period during which the proclamation is in force,
or for such shorter period that may be specified in
the order. The Constitution contemplates declaration
of only one Emergency, whether the satisfaction of the
President depends upon the existence of Emergency
arising out of war or out of external aggression or in-
ternal disturbance. The Emergency declared has no
different qualities or connotations, according as the
ground on which the President is satisfied, depends
upon the existence of war or external aggression or
internal disturbances. It may be recalled that there
was an Emergency already declared and was in opera-
tion since December 1971. . That Emergency had
never been withdrawn. The Defence of India Rules
were in operation as promulgated under the Defence
of India Act enacted as an aftermath of the Emergency.
The provisions .of Article 358, by which the funda-
mental rights under Article 19 were suspended, were
also in operation. The Constitution, in the opinion of
the Commission does not contemplate the issue of an
Emergency upon an Emergency already existing, nor
prevents the courts from entertaining any challenge to
fee declaration of this additional Emergency. But
the provisions of the Constitution were amended by
the 39th Amendment of the Constitution Act, which
prevented a challenge being raised. But even when
there was already in existence and in operation an
Emergency under which powers could be exercised,
another Emergency was declared and the original Rules'
i.e., Defence of India Rules were modified as Defence
and Internal Security of India Rules, 1975.

5.70 This was more in the nature of a shock treat-
ment, than a legally permissible Emergency, which
could be declared according to the law then in force.

5.71 If, however, an Internal Emergency could be
declared apart from the External Emergency, the
powers which were exercised before any Rules 'were
framed, i.e. disconnecting the electricity connections of
newspaper offices were wholly unauthorised, since
there was no law which conferred upon any authority
such power. Again, the action taken by the autho-
rities under the directions of the Prime Minister to
arrest a number of political leaders was not supported
by anytlasy. As will be. pointed out hereafter, orders
could Sffwere, in facPJassued under the Maintenance
of Internal Security Act or any other statutory provi-
sion by any authority competent in that behalf after
due satisfaction on matters submitted before that
authority. Prima jacie, therefore, the disconnection of
electricity connections of a number of newspapers and
orders for arrests of a number of political leaders and
others without complying with the requirements of
law, was unauthorised and amounted to wrongful
arrests and detentions; and the disconnection of the
electricity was against the provisions of the Indian
Electricity Act, 1910.

5.72 It may be necessary also to mention that the
conclusions arrived at by the Intelligence Bureau after
mounting surveillance upon political leaders and others,
including tapping of their telephones raise a grave issue
of public interest. It has relevance to the assault on
the liberty of an individual, which in a democratic
country has very great importance and significance.-
Even the Ministers of the Government were not spared
in the action taken by the Intelligence Bureau. They
were subjected to the indignity of being shadowed and
their telephones were tapped. Such a power, if at
all, could be exercised only when authorised by statu-
tory provisions arid circumstances strictly necessary for
ensuring the security of the Stale in grave times either
of internal disturbance or external aggression or war
and not at other times. On the materials placed
before the Commission, there does not appear, to be
any statutory authority pursuant to which this action,
of the Intelligence Bureau was taken. In his state-
ment to the Commission, Shri Atma Jaya Ram, the
then Director, Intelligence Bureau, has stated that "if
was the normal or usual practice to give such intelli-
gence orally or in writing". Such action does not
appear to be justified by the existence of any circums-
tance necessary for ensuring the security of the
State against External aggression, war or internal
Emergency.

5.73 As. already submitted, it is for. the Government
to decide whether or not the Intelligence Bureau may
be used for collecting information for purposes other
than those strictly necessary for the security of the
State. It would certainly be a travesty of the demo-
cratic institutions if the Government constituted by a
political party is entitled to watch the activities of other
political parties and even of members of its own party.
If, however, such power is to be conferred on this
institution, it must be by a statute or statutory Rules
authorising it in that behalf. It is also to be ensured
that this watch or surveillance does not degenerate into

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abuse and/or misuse of authority, which may well
militate against individual freedom and liberty, A
provision should, therefore, be made to see that it is
resorted to only in extreme emergencies, when it is
thought that it is appropriate to do so. In any event,
this watch of the intelligence agency on individuals
and the materials collected thereby should be open to
scrutiny to a Board or a Panel composed of officers or
of public men before authorising the continuance of the
watch. It should be possible to harmonise the demands
of the security of the State With the democratic
liberties.

5.74 The problems that die LB. is being called upon
to handle are increasingly becoming more and more
complex, to be left to the judgment and decision of one
individual or even a hierarchy of individuals involved
directly with the job. It needs to be realised that the LB.
as an institution plays a very important and vital role
in the life and affairs of the nation. On its being able
to function efficiently, effectively and yet impartially
and objectively, depends not only the security of the
State' but also the liberty of its citizens. Considering,
therefore, the stakes that are involved in the proper
and purposeful functioning of the LB., it is imperative .
that it gets the benefit of advice, guidance and wisdom
of a body of eminent, experienced and patriotic group
of individuals drawn from different disciplines and
whose loyalty and personal integrity cannot ever be
called into question. This in turn will generate the
requisite faith and confidence of the citizens of the
country in this very important institution on the fair,
correct and proper functioning of which alone would
eventually depend the safety, the security and the liberty
of the people of this country.

5.75 This is only to emphasise that the Intelligence
Bureau should not be entitled to act as a super- watch-
men over the activities of politicians to whatever party
they belong and the activities of the Intelligence
Bureau should be subject to regulation and control in-
sofar as these activities concern some of the clandestine
parts which have come to the notice of the Commission,
to ensure that this does not degenerate into misuse or
abuse of authority. In a strict theoretical sense in a
democratic country any secret operation of the nature
conducted by the Intelligence Bureau, which have come
to the notice of the Commission, would be contrary to

; the democratic norms. The Intelligence Bureau should
not be its own judge of its operations with regard to
the necessity or the propriety thereof, nor should it be
allowed to act as an agency or an instrument of politi-
cians or to degenerate into an institution of controlling
the opponents of the political party in power or ele-
ments within the party in power with which the' control-
ling authority of the party does not see eye to eye.

5.76 In the present case the watch on. a senior
Minister of the Cabinet rank and tapping of the tele-
phone of Shri Jagjiwan Ram could not be justified. It
is somewhat of a mysterious circumstance, that such
surveillance should have been maintained and allowed
to continue. There is n6 evidence as to who ordered it,
what steps were taken to ensure that the reports
emanating from the Bureau were tested„.and found to

be correct ; and what were the safeguards the Govern-
ment took to prevent and protect itself from acting on
incorrect and incomplete information ?

5.77 The Water Gate affair and its aftermath in
the United States of America led to some very useful
improvisations of built-in safeguards for overseeing the
activities of that country's Intelligence Agencies.

5.78 The Commission recommends that appropriate
safeguards are necessary and should be devised by the
Government so as to protect the activities of the In-
telligence Bureau being used as an instrument of
political spying either by the Government or by some-
one in the Government. This issue has been raised
to concentrate attention and if considered appropriate
to generate public debate on the question.

5.79 It is also necessary to invite attention to the
misuse of Air Force aircraft. It appears that for the
benefit of individuals for travelling on State duty or
for State work Indian Air Force aircraft have been
used surreptitiously and, according to the existing
Rules, those persons were not entitled to the us© of
the Aircraft. The Commission recommends to the
Government the framing of appropriate Rules in this
behalf and also to scrutinise whether the use of the
Aircraft on June 25, 1975 in the circumstances was
warranted and, if not, whether bills for charges ap-
propriate in that behalf were duly tendered and, if not
tendered, to identify those responsible for breach of
the Rules.

5.80 Attention may also be invited to the gross
irregularities to which the provisions of the Mainten-
ance of Internal Security Act and provisions of the
Defence of India Rules were misused to the detriment
of political opponents. This question will be dealt
with at some length hereafter. But it may be suffi-
cient at this stage to observe that the minimum require-
ments of the provisions of the Maintenance of Internal
Security Act and the Defence of India Rules were not
complied with, either at the behest of Smt. Indira
Gandhi or her aides and orders were made without
any grounds, without any satisfaction or maintenance
of any record regarding* the satisfaction of competent
authorities; and personal liberty of many citizens was
taken way and they continued to remain deprived of
that liberty for substantial periods even in face of the
safeguards which were incorporated against misuse
of section 16A of MISA which was disregarded with
impunity.

5.81 In Delhi and in the States, which had advance
information about the promulgation of Emergency,
a large number of anests/detentionS followed under
MISA in which the safeguards guaranteed against the
misuse of the Act were ignored and grounds of de*
tentions were not furnished in a large number of cases
and in many cases grounds of detentions were prepar-
ed and even pre-dated and sent many days after the
persons concerned had been arrested/detained in jails.
In a number of cases grounds of detentions had no
relevance to the factual positions and in a feV easel
grounds were fabricated by the police and the, Magis-
trates did not hesitate to sign them. An era of collu-
sion between the police and the Magistracy ensiled. In

many cases oral instructions were, issued from the
State Headquarters for arrests of persons under MISA,
In quite a few cases the persons were initially taken
into custody under the preventive sections of law and
thereafter detained under MISA. This was the de-
vice, which appears to have been resorted to in the
Union Territory of Delhi .shortly after the promulga-
tion, of Emergency. A number of persons were arrest-
ed on false charges under section 108 or section 151
of the Code of Criminal Procedure or under both
these sections. Such persons were produced before"
the Magistrates and the Magistrates in a number of
cases either declined to grant bail or there was delay
in effecting the orders of bail and in the meanwhile
orders of detentions were procured from the Magis-
trates, which were passed not infrequently on non-
existent or fabricated grounds. The manner in which
the provisions of MISA were used was nothing short
of perversion and mockery of its provisions and all the
safeguards and guarantees that had been promised in
the Parliament when the MISA Bill was enacted, were

totally disregarded. Many apprehensions, which were
expressed by the Members of Parliament, who spoke
against conferment of such wide powers when the Bill
was enacted, came true.

5.82 The safeguards enshrined in the enactment
were rendered meaningless by the callous misapplica-
tion of this Act by the police and the Magistracy, in
many cases with the fall knowledge and concurrence
of some of the State Governments. The use and/or
the misuse of this. Act raises issues, which requires
examination in the larger context. At no time, either
normal or abnormal, should there be any possibility
of misuse of the powers of arrests. It needs to be
made clear to all those responsible for overseeing the
correct application of the powers of arrest/detention
by the junior officers, that the senior functionaries at
the bureaucratic and political levels would be held
directly accountable for any misuse or abuse of the
powers of arrest and detention..

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CHAPTER VI

6.1 The Commission availed itself of the opportu-
nity of going through a large number of files of the
Information & Broadcasting Ministry relating to the
enunciation of policies on various aspects connected

. with the management of the different media of the
Government during the Emergency. Quite a number
of these items also came up for hearing before the
Commission and several witnesses made statements
before the Commission with regard to the information
that was in their possession or the experiences that they
personally had undergone as a result of the policy
then followed by the Information and Broadcasting
Ministry of the Government. The items that have
been brought out^and which are being reproduced
below are based on documents of the Government and
statements of the witnesses, both official and non-
official.

6.2 The Commission feels that it is necessary to
place oh record the actual working of tije I, & B.
Ministry during the Emergency, as a part of the
record of the times, in so far as it is reflected in the
following pages.

6.3 Having regard to the voluminous nature of
the evidence, the Commission has not thought it ap-
propriate to issue any summons under section 8B of
the Commissions of Inquiry Act or notice under rule
5(2)(a) of the Commissions of Inquiry Rules to any of
the persons figuring in the note. -The Commission,
therefore, refrains from drawing any adverse inference
or making any comments which would affect the
reputation of any of the individuals concerned. This
is, however* without prejudice to the notices under
rule 5 (2) (a) and summons under section 8B of the
Act issued to Shri V. C. Shukla with regard to the
following three cases, which are being dealt with
separately :

(i) Translation of the Congress manifesto;

(ii) Printing of posters; and

(iii) Treatment meted out to Shri Kishoi'e Kumar.

6.4 The media policy of the Government was enun-
ciated by the then Prime Minister, Smt. Indira Gandhi
at a high level meeting which was held under her
Chairmanship on July 26, 1975, which was attended
amongst others by the Law Minister, Shri H. R. Go-
khale, the I. & B. Minister Shri V. C. Shukla and the
Chairman Policy Planning Committee of the Ministry
of External Affairs, Shri G. Parthsarathy. At this
meeting it had been decided that a law should be made
to prevent scurrilous, malicious and mischievous writ-
ings in newspapers and journals, that news agencies
should be re-structured, that the Government policy
regarding issue of advertisements by DAVP should be

reviewed, that the Press Council should be allowed to
die a natural death, and a review should be made of
all facilities which had been given to Press correspon-
dents by the Government.

6.5 While explaining the reasons for the imposition
of Emergency, Smt. Gandhi had said that it was the
newspapers which were inciting the people and creating
a terrible situation. According to her, the agitation
was only in the newspapers and once the newspapers
were placed under censorship there was no agitation.
Similarly, in a letter which she wrote to Shri Saroj
Mukherjee, Member of Parliament, she said that the
Press had been fomenting trouble baselessly and had
exaggerated rumours.

6.6 Shri B. G. Verghese, former Editor of the 'Hin-
dustan Times', New Delhi, who was examined by
the Commission, said tr>at Shri V. C. Shukla in his
first meeting with Delhi Editors had told them that
no confrontation would be permitted between the
Press and the Government and he explained that this
meant, the end of dissent and protest. Shri Shukla,
has, however, explained that what he meant by the
word 'confrontation' was that ' there should b&
no fight or quarrel between a free Press and a
Government elected by democratic processes.

6.7 The reasons for the measures taken against the
media in general and the Press in particular was,
according to Shri B. G. Verghese, tp keep the public
in ignorance and: instil fear in then! thereby suppfess-
igg^dissent in every_form, mdiyidual, political, parlia-
jrrrentaj^aad4udidal_aj^thatjt was used as an.instxu-
rD£jtf-of r -n«w4-manag£mejit_ ajined at thought .control.
Shri Raj Mohan Gandhi, Editor of ^Hiramat' Bombay
has confirmed that censorship was used to eliminate
dissent and it vastly exceeded the requirements of the
Defence and Internal Security of India Rules. He said
that Government achieved this total power to prevent
publication of dissent in a round-about manner, because
it did not want the stigma of officially imposed pre-
ceiisorsbip. The Government, according to Shri Raj
Mohan Gandhi wanted the powers of a dictatorship.'
with the prestige of a democracy Shri Romesh Thapar,
Editor of 'Seminar' New Delhi has testified to the at-
mosphere of fear that surrounded everyone in the
profession. Even Editors of national dailies would
not speak openly against the steps that the Govern-
ment had taken against the media.

6.8 This pervasive atmosphere of fear in the media
forced many periodicals, to close down publication as
they could not find any printer to print their copies.
Thus, Shri A. D. Gorwala, Editor of 'Opinion', could
nOt find a printer and ultimately he resorted to cyclcn
styling his magazine and mailing the issues to indivi-
dual subscribers. Shri S. M. Joshi of 'Sadhana',

Poona, also had to change his press as the ■■'keeper of
the press 'Janwani' was issued with a notice as to
why his press should not be forfeited for printing
'Sadhana'. Shri Romesh Thapar has also testified as
to how the 'Statesman' press refused to print his
magazine unless he allowed the 'Statesman's' lawyers
to first check the articles.

6.9 The functioning of the media during ^he Emer-
gency period can be discussed under three main
heads : —

A'. Censorship.

B. Other pressures on the Press.

C. Functioning of Government Media Units par-

ticularly, A.I.R. and Doordarshan.

A, CENSORSHIP

(1) Imposition oj Censorship and disconnection of
electricity supply

6.10 Consequent upon the declaration of Emergency
op June 25, 1975, control of the media had become
necessary. At the Cabinet meeting held at 8.30 p.m.,
on June 26, 1975 the Cabinet, while reviewing the
Emergency situation agreed with the recommendations
Of the Ministry of Home Affairs to impose Press Cen-
sorship. During the 2 or 3 days when the censorship
apparatus was being Set up, power supply to the news-
paper offices in Delhi remained disrupted. The Go-
vernment disconnected electricity \d., the newspaper
offices on the night of the June 25, 1975. when Emer-
gency was imposed. • Shri B. N. Mehrotra, "who was
the then General Manager of Delhi Electric Supply
Undertaking was given oral orders on the night ' of
June 25, 1975 by the Lt. Governor of Delhi, Slid
Krishan Chand that electric supply to the newspaper
offices in the city should be disconnected. Though
under the provisions of the Electricity Supply Act or
the Electricity Act this was not within the competence
of the General Manager, Delhi Electric Supply Under-
taking, the disconnection was carried out on the basis
of certain security reasons that were adduced without
any formal orders on that behalf. As some of the
newspapers lay outside Bahadurshah Zafar Marg area
(the Motherland in Jhandewalan, Hindustan Times and
the Statesman in Connaught Place) the electricity to
these papers could not be disconnected simultaneously.
However, electricity to all newspaper offices on Baha-
durshah Zafar Marg was disconnected whereas in
other areas disconnection took place only on June 26,
1976. Two or three days later after the censorship
apparatus had been set up, electricity supply was res-
tored to all the newspaper offices. According to Shri
Krishan Chand, the then Lt. Governor of Delhi, the
instructions for disconnecting power supply came
during one of a series of meetings at the Prime Minis-
ter's House on June 25, 1975, but he was unable to
recollect as to who gave the specific orders.

(2) Rule 48

6.11 Censorship was imposed under Rule 48 of
Defence and Internal Security of India Rules. This
Rule gave authority to the Government to censor or

pre-censor matters only in respect of the following
subjects : —

(i) Defence of India;

(ii) Civil Defence;
(iii) Public Safety;

(iv) Maintenance of Public Order.; and
(v) Efficient conduct of Military Operations.

6.12 On June 26, 1975 the Government issued
Statutory Order 275(E) under Rule 48, which listed
the subjects which came within the scope of pre-
censorship. This order was subsequently expanded
to include additional subjects.

(3) Censorship Guidelines

6.13 In practice, however, censorship was carried
on through a set of guidelines issued by the Chief
Censor from time to time, both to subordinate offices
and to the Press. It is to be noted that it was speci-
fically mentioned that these guidelines were themselves
not to be published.

6.14 The first set! of guidelines were issued on
July 3, 1975 and supplementary guidelines on
July 4, 19751 According to Shri H. J. D'Penha, the
then Chief Censor to the Government, these guidelines
were hurriedly drawn up and were vague and, there-
fore, a fresh set of guidelines were prepared and issued
on July 13, 1975. These guidelines were prepared by
Shri K. N. Prasad, Additional Secretary, Information
and Broadcasting Ministry and were finalised at a
meeting, with the then Secretary, I & B Ministry, Shri.'
A. J. Kidwai and Shri H. J. D'Penha. These guide-
lines were approved by the Minister, Shri Vidya
Charan Shukla. These guidelines exceeded the scope ;
of the Rule 48 of the Defence and Internal Security
of India Rules insofar as they prevented Editors
leaving editorial columns blank or filling them with
quotations from great works of literature or from
national leaders like Mahatma Gandhi or Rabindra
Nath Tagore or conveying disapproval of the Gov-
ernment's measures undermining public confidence in
national credit or any Government loan. The Infor-
mation and Broadcasting Ministry did not attempt to
find out whether these guidelines Were within the
scope of the Defence and Internal Security of India
Rules or not. According to Shri H. J. D'Penha, a sug-
gestion had been made by him that the approval of
the Law Ministry should be obtained for these guide-
lines so that they would be in conformity with Statu-;
tory order 275(E). The Minister had, however, ins-
tructed that in case these guidelines were challenged in
court, appropriate action could then be taken. Shri
Shukla during his testimony before the Commission
said that these were not intended to have any statutory
force and that these guidelines were devised merely
(o assist the editors, and therefore, no action was
taken to find out whether they were in consonance with
the law on the subject. Merely disobeying the guide-
lines would not have warranted any action against the
newspaper concerned.

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.6.15 However, this contention of Shri Shukla that
the guidelines did not have any force of law, and that
disobeying them would not warrant action, does not
appear to be correct. Counsel for the Union Gov-
ernment and for the Chief Censor had in the 'Bhoomi-
putra' case before the Gujarat High Court himself
relied upon these guidelines In support of the impug-
ned order of censorship on 'Bhodmiputra'. The
Gujarat High Court, however, held that these guidelines
were illegal and inoperative. The Gujarat High
Court also said that after Rule 48 had been made, the
Central Government and the Chief Censor had gone
stride after stride beyond the scope of Rule 48.

6.16 Similarly, in the Binod Rao's case, the Bom-
bay High Court held that under the censorship orders,
the Chief Censor could not possibly issue instructions
in the guise of directions which go beyond the scope
of censorship.

(4) Censorship of -Parliament and Court Proceedings

6.17 Parliamentary and Court proceedings were
also subject to censorship. The guidelines issued on
July 13 1975 had stated that censorship would apply
to the publication of some news etc. relating to the
proceedings of Parliament and of Legislative Assemb-
lies. The guidelines inter alia stated that statements
made On behalf of the Government could be publish-
ed either in full or in a condensed form but its contents
should not infringe censorship. Nothing else was
allowed to be published except the names and party
affiliation Of the Members speaking on a subject in
support or against the subject. The result of voting
could be factually reported.

6.18 Supplementary guidelines for Parliament cove-
rage for the Censor were issued on 22-7-1975. These
guidelines inier alia laid down that (a) movement of
Members within the House should not be reported, e.g.,
ruling party Members moving to the opposition bench-
es or vice-versa, (b) remarks from the Chair in either
House should not be allowed as a part of the proceed-
ings of the House, (c) reference to some of the empty
seats in the Opposition Benches should not be allow-
ed, (d) names of Members who were absent was also
not allowed.

6.19 Following a meeting held at the residence of
Shri K. Raghuramiah, Minister for Parliamentary
Affairs on December .13, 1975, which was attended
amongst others. by Shri V. C. Shukla, Minister for
Information & Broadcasting, Shri Om Mehta, Minister
in the Ministry of Home Affairs, Shri S. N. Banerjee,
Secretary General, Rajya' Sabha and Shri M. L. Shak-
dhar, Secretary General, Lok Sabha, it was decided
to impose mandatory pre-censoiship on all newspapers
and agencies in regard to news, comments, rumours
or other reports relating to the Lok Sabha and Rajya
Sabha Sessions which were to be held in January
1976. The guidelines issued on January 4. 1976 to
the Censors for covering the proceedings of the Parlia-
ment clearly laid down that news, reports, comments
relating to the proceedings of the Parliament, would
be governed bv Rule 48 of the Defence and Internal
Security of India Rules arid, therefore, the publication
of news regarding Parliament had to be cleared by the

Censor Officer before it could be published. A long
series of 'dos 5 and 'douts' had been given in these
guidelines, but they were all subject to the final proviso
that any report or news which was violative of cen-
sorship rules in force at that time would not be per-
mitted.

6.20 From the January Session of Parliament, a
Censor Room started functioning from Room No. 64,
1st Floor, Parliament House. Censors worked there
in two shifts from 10.30 a.m. to 3 p.m. and 3 p.m.
to 10.00 p.m. It was also decided that there would
be no name board affixed On the door to show that it
was the Censor Room.

6.21 On January 14, 1976 all news etc., relating
to questions and answers, statements and discussions
on censorship in Parliament were expressly disallowed
from publication. On 7th March, 1976 fresh guide-
lines were issued for Parliament. These guidelines
said that the image of Parliament as the voice of the
people and as a sovereign body should not be allowed
to be impaired but all news etc., relating to the pro-
ceedings of the Parliament were to be governed by
Rule 48 of Defence and Internal Security of India
Rules.

6.22 As regards courts of law, guidelines were
issued to the press which said that while publishing
news, comments or reports relating to proceedings in
a Court of Law only the operative part of the judg-
ment was to be published in appropriate language
and nothing should be published which would infringe
censorship laws. During the course Of his testimony,
Shri HJ.D'Penha, Chief Censor said that publication
of Court judgments were censored under the instruc-
tion- of the Ministry of Home Affairs after consultation
with the Law Ministry. When it was pointed out to
him that in the 'Bhoomiputia' case, where the High
Court had ordered that judgment should not be censor- -
ed and yet he had issued instructions to all newspapers
that the judgment should not be published, he said
that it was not a censorship order but merely 'public
relations' advice.

6.23 Not merely the publications of court judg-
ments were censored but directions were also given
as to how particular judgments should be published.
In Smt. Indira Gandhi's appeal to the Supreme Court,
in her election petition case, a series of directions were
issued by the Chief Censor on what aspects of the
case should be given publicity and what aspects of the
case should not be played up at all. When the judg-
ment was delivered in this case, instructions went to all
newspapers to play up the fact that Smt. Indira
Gandhi's appeal had been upheld and that the cross
appeal of Shri Raj Narain dismissed.

6.24 According to Shri H. J. D'Penha this was
done on the instructions of the Ministry of Informa-
tion & Broadcasting. Shri D'Penha admitted to issu-
ing a number of instructions regarding how judg-
ments of Supreme Court and other Courts should be
carried by newspapers and said that these had been
done under the instructions of superior authorities.

6.25 Shri V. C. Shukla, Minister for Information
& Broadcasting said that any instructions that he bad
issued regarding publication of High Court judgments
were subject to law. According to Shri Shukla no
officer of the Ministry was expected to flout the law
in any matter or go against the directions of the
Courts.

(5) Transfer of Powers to administer Rule 48,
DISIR from Ministry of Home Affairs to Minis-
try of Information and Broadcasting

6.26 When censorship was originally imposed, the
powers under Rule 48 of Defence and Internal Secu-
rity of India Rules were with the Ministry of Home
Affairs though the actual functioning of the censorship
machinery was under the Ministry of Information and
Broadcasting. The Ministry of Home Affairs fre-
quently expressed its unhappiness at the short notice
which was generally given and the scanty material
which was supplied by the Information & Broadcast-
ing Ministry when it requested the Ministry of Home
Affairs to issue pre-censorship orders.

6.27 Thus when the 'seminar' Magazine was placed
under pre-censorship, the Information & Broadcast-
ing Ministry sent a note which did not even contain
relevant extracts o'£ the publication which were con-
sidered prejudicial. Sufficient time or opportunity
was hot given to the Ministry of Home Affairs to
consider the case. On the other hand the Informa-
tion & Broadcasting Ministry expected that orders
would be issued immediately. At a meeting held by
the Information & Broadcasting Minister, Shri V, C,
Shukla, on July 15, 1976 with Shri R. L. Mishra,
Joint Secretary (IS), Ministry of Home Affairs, Shri
Shukla expressed the view that there was a conven-
tion that once a case had been cleared at his level and
he had taken a decision, no further examination
should take place in the Ministry of Home Affairs.
At that time a decision was taken at the Home Minis-
ter's level that while the Ministry of Home Affairs
would process cases expeditiously, the I & B Minis-
try would supply full material on which, the Ministry
pf Home Affairs could then exercise its own judg-
ment.

6.28 Subsequently the Information & Broadcasting
Ministry again on August 21, 1976 asked for pre-
censorship orders under Rule 48(1) to be issued to
Indian Express. Again no reasons were adduced.
As the Information & Broadcasting Ministry was in-
sistent, the Home Minister's orders were obtained on
telephone and pre-censorship orders issued. Seeirg
the reluctance of the I & B Ministry to furnish de-
tails and requisite material to the Ministry of Home
Affairs it was decided by the Home Minister that all
powers under Rule 48 should be transferred to the
Ministry of Information and Broadcasting.

(6) Day-to-day operation of censorship

6.29 The actual work of censorship on day-to-day
basis went even beyond the scope of the guidelines.
Orders were arbitrary in nature, capricious and were

usually issued orally without any relation to the pro-
visions of Rule 48. Issuing of oral orders had been
expressely forbidden by the Chief Censor in the guide-
lines which he had issued on July 13, 1975. Shri
H. J. D'Penha has said that in view of the time
schedule involved and the round-the-clock working
of daily newspapers and agencies, reducing orders in-
to writing would have defeated the very purpose of
censorship and hence from almost the very beginning
directions on subjects to be censored were issued
orally. Shri D'Penha has also said that he himself
used to receive such orders from various authorities
in the Information & Broadcasting Ministry and in
other Ministries and these orders were very seldom
reduced into writing. Most of these instructions
have been recorded in a Log Book (4 volumes) main-
tained by the Duty Roorn of the Censor Department.
A few representative illustrations from the Censors
Log Books are reproduced below : —

(1) 'No story is to be cleared pertaining to
Parliament business or Supreme Court
appeal filed by Prime Minister. No refe-
rence to the case' (12th July, 1975)

(2) 'As per instructions only the date

fixed for hearing of PM's appeal is to be
given. Lawyers' name may be given. . . .
no names of judges are to be given' (14th
July. 1975)

(3) 'Reports on proceedings in the Verghese
V/s Birla case should be reduced to the ;
minimum and should be very brief. The
arguments need not be mentioned. If they
are allowed, should not be more than a
para or two' (22nd July, 1975)

(4) 'There has been a 'bu'ndh' in Ahmedabad,
organised by the ruling party (Janta Front).
If the agencies and the correspondents'
copies say that the 'bundh was a flop' it
may be allowed, provided the description
of the 'bundh' does not go against Censor
instructions'.

(5) 'Any statement made by the Chief Minister,
Gujarat, criticising any action taken by the
Centre should be spiked, but if his state-
ment is innocuous it may be allowed. In
case of any doubt, please ring up Addition-
al Chief Censor, Shri U. C. Tiwari' (26th
July, 1975)

(6) 'No reports, comments (including editorial)
articles, statement or news on bonus to
employees shall be allowed Until further
instructions from Us' (4th September, 1975)

(7) (i) No adverse criticism of the Ordinance

on Bonus by Trade Unions in Public
Sector Organisations is to be allowed;

(ii) Editorial comments on bonus are per-
missible;

-*_*_-*.-.. _„l ^t^rjvt ... j'aj..: ^.^.. ..

(iii) These comments should be within the
official explanation on the bonus issue
and should not support an agitational
approach; and

(iv) That these comments are subject to pre-.

censorship.

(a) Teleprinter message to all the State
Censors has been sent on the above
lines, with the following addi-
tions ; —

'words like 'shock', 'deplore* or
'ill-advice' should be altered to
'disappointed' or 'surprise'. (26th
September, 1975).

(8) 'Please ensure that Allahabad High Court
judgment today upholding MISA detenues*
right to move High Court under. Article 226
is not published in the State. Instruct your
Censor in- Allahabad to kill story' (30th
Qctober, 1975)

(9) 'As required, the official version of J. P.'s
release with instructions not to give pro-
minence to the news and not to use photo-

■ ■!:.. - graphs was communicated to agencies and

local papers * (13th November,

1975)

(10) 'KMLP (Gujarat) has been dissolved.
There is likelihood of some members issu-
ing statements withdrawing support to the
Janta Front Government in Gujarat. Such

v: statements should be allowed. Statements
pledging support to the Janata Front Gov-
ernment by some of the members should
be spiked' (Instruction CC) 11th February,
. \, 1976)

(11) 'All the statements made by the Janta Front
Leaders alleging that Centre or Congress
was out to topple their Ministry or that
Janta Front would take to agitation etc.,
should not be allowed. The statement of
KMLP leaders dissolving their party,; in
support of the Janta Front are also not to
be allowed. Anything which is unhelpful
to the present plan of the Centre should
be killed' (15th February, 1976)

(12) 'As desired by JCC(P) all the local dailies
and news agencies were informed that
Shri Tulmohan Ram's case should be sent
to us for pre-censorship. All references to
Shri L. N. Mishra, Shri Chattopadhyaya
and Shri N. K. Singh are to be deleted'
(5th March, 1976)

(13) 'About mid-day today the office of "Veck-
shanam' daily (Cochin) wag searched by
the police for reasons not known. This
daily newspaper is run by the Kerala
Pradesh Congress Committee. Some of the
newspapers which referred a story on this
to me were advised not to carry anything
for the time being '

S/3<) HA/77— 6

N.B.< — This development assumes more import-
ance in view of the widening rift within the
Congress Party in the State. The section
which is rallying behind the PCC President,
who publishes the daily is very sore about
the. police search. The Police portfolio is
held by the Congress Minister, Shri Karu-
nakaran who is identified with the rival
section in the party.

(This incident is likely to precipitate fur-
ther) (22nd April, 1976).

(14) 'State Censors have been advised not to
permit any comments or references about
the transfer of High Court judges' (1st
June, 1976)

6.30 In practice censorship was utilised for sup-
pressing news unfavourable to the Government, to
play up news favourable to the Government and to
suppress news unfavourable to the supporters of the
Congress Party. During his statement before the
Commission Shri D'Penha admitted^ that this was done
under the instructions of the Ministers/Ministry. He
also said that various items of news referring to fac-
tionalism in the Congress Party were also censored
on instructions- — but he has not said whose instruc-
tions these were. Shri Shukla has said that he had
not given any instructions regarding factionalism in
Congress Party or to censor adverse or critical
comments on the Youth Congress.

6.31 However, in one instance at least, that of .the
magazine 'Mainstream' pre-censorship orders were
issued largely because of its critical attitude towards
Shri -Sanjay Gandhi, Shri Nikhil Chakravarty, Edi-
tor 'Mainstream' told the Commission that Shri Shukla
had called him and told him that Shri Sanjay Gandhi
was a national leader and hence articles criticising
him would not be permitted, Shri Chakravarty was
asked to give an assurance (hat he would refrain from
criticising Shri Sanjay Gandhi, an assurance which
he refused to give. Subsequently the 'Mainstream',
was placed under pre-censorship because it had criti-
cised Shri Sanjay Gandhi and also because it had cri-
tically commented on the toppling, of Chief Ministers
who did not enjoy the favour of a particular coterie
at the Centre. Shri Shukla has, however, stated that
he had merely advised Shri Chakravarty with the best
of intentions and any action against Shri Chakravarty
and 'Mainstream* that followed had nothing to do
with the acceptance or otherwise of his advice^.

6.32 The capriciousness of the Censor authorities
and their "arbitrariness has been commented upon fey
a number of Editors. Shri Cho Ramaswamy,' ESi-
tor^Tughiak', gave a number of examples" of how
jokes,.. cartoons, and satirical articles in his. magazine
wer§ ^iil_ jsiibjected to censorship without their being
even remotely concerned with the Defence and Inter-

. nal Security of India Rules and Statutory Orders
made thereunder. Thus even birthday greetings to
ShriUMorarji Desai on the latter's birthday which was
sought to be published in the ' Tughlak' was completer
ly'censored. Even quotations from statements made

by Smt. Indira Gandhi were taken^objectton to by the
Censor. Shri Ramaswamy disclosed how he was
asked to submit articles and sometimes whole issues
of his magazines for pre-censorship because the issue
of 'Tughlak' dated July 15, 1976 carried (i) editorial
excerpts from Nehru <ii) letter's from readers'
(iii) quolations from speeches of Indira Gandhi
(iv) quotations from Hitler (v) quotations from
Mussolini (yi) passages from state play 'Tughlak'
all of which were held objectionable by the Censor.

6.33 Shri Nikhil Chakravarty has related how Shri
Shukia objected to quotations from Tagore,
Mahatma Gandhi etc., and said that they could not
be used. Shri A. D. Gorwala, Editor of the
'Opinion' had included quotations from the Gita in
his magazine and the whole quotation was censored.
Even speeches made in Parliament— Lok Sabha,
which had been published with the permission of the
Speaker of the House and were available for sale at
Rs. 2 were not permitted to be published by the
Censor in Shri Gorwala's 'Opinion' magazine. Shri
Gorwala further stated that when censorship came.
it struck him that the only purpose a paper like his
could serve would be to try and encourage the spirit
of freedom and that is why he continued publishing
and in his first issue brought out a series of quota-
tions on liberty. This was struck down by the
Censor; after that if there was even a word 'liberty'
6r 'freedom' or any reflection about democracy it
would be struck out.

'6.34 Shri S. M. Josh\ Editor of 'Sadhana' while
corroborating Shri Gorwala, Shri Chakravarty and
Shri Ramaswamy about how the Censor took objec-
tion to his publication of quotations from Mahatma
Gandhi and other eminent persons, said that the ob-
jective of the Government was to see that everybody
was silenced and in respect of censorship the ques-
tion of law did not exist.

6.34A Shri Shukia said that the reasons why quota-
tions were disallowed were that that these quotations
which were made with reference to the British Raj
were now taken out of context, would create mis-
understandings and therefore they should be avoided.

6.3'5 Newspapers were not even allowed to keep
the editorial columns blank. According to Shri
Shukia if the editorial space was left blank this signi-
fied protest and according to the policy of the Gov-
ernment it was not proposed to allow any protest to
be signified in that manner. He further clarified that
space kept blank in a newspaper was a protest agaiiift
the emergency. Therefore, it was unlawful and
therefore, the Government was entitled to say that it
should not be left blank. Both Shri Raj Mohan
Gandhi and Shri Nikhil Chakravarty felt that Gov-
ernment's objection to editors leaving space blank in
the newspapers was because they wanted to give an
impression that there was no censorship in the
country.

6.36 According to Shri Chakravarty this was an
attempt at self-deception on the part of the Govern-
ment whereas Shri Rajmohan Gandhi felt that accord-
ing to the Censor blank space signified disapproval of

Governmental policies. Since the Government also
wanted favourable articles, one way of forcing journals
to carry such stories was by not allowing them to
keep spaces blank.

7. Censorship during Elections

6.37 When elections were announced on 18th
January, 1977, censorship was relaxed and censoi'-
ship laws were held in abeyance. Even then an
effort was made to maintain control over the activities
of the press. The Government tried to pressurise
the press by giving informally 'off the record' warn-
ings by veiled threats o'f what would happen to them
after the elections if they did not comply with the
directions of the Government, by asking that certain
articles should be published and by enforcing the
Code of Ethics.

6.38 According to Shri Girilal Jain, Editor oi
'Times of India', Smt. Gandhi tried to persuade the
editors to constitute a supervisory committee to over-
see the working of the press. To do this a Code of
Ethics was drafted by the officials of the Ministry;
journalists had very little to do with it, and had not
accepted it as the Code of Ethics was quite restric-
tive.

6.39 Shri Nikhil Chakravarty in his testimony has
explained how the Code of Ethics was passed in the
absence of .veteran and senior journalists, who were
the members of the Committee of Editors and who
had tabled a large number of amendments to this
Code, which had been drafted by I&B Ministry offi-
cials. Subsequently Shri Shukia got the All India
Newspaper Editors Conference also to approve of
this Code. According to Shri Chakravarty, Shri
Shukia wanted to have the Code of Ethics made into
a Jaw but the Cabinet opposed it. According to
Shri Chakravarty and Shri H. Karlekar, Editor of
'Hindustan Times', none of the journalists or their
organisations had accepted the Code.

6.40 Shri L. Dayal, Principal Information Officer
to the Government of India' admitted that there wps
opposition from the journalists to the Code of Ethics
because its origin and source were tainted. Shri V, C.
Shukia, the then Minister for Information and Broad-
casting while tracing the history of the evolution of
the Code of Ethics said that the suggestion for putt-
ing into practice this Code came from the members'
of the. Central Committee o'f Editors. This Centra!
Committee of Editors was nominated by the Govern-
ment of India and was supposed to be a, representa-
tive body. Shri Shukia admitted that the Code of
Ethics was approved by the Editors at a meeting in
Calcutta where some of the Editors who had suggest-
ed amendments could not be present. Shri Shukia
emphasised that this Code was accepted by most of
the professional bodies of the industry and that no-
body made any serious objection to this Code.

6.41 Shri S. Sahai, Editor, Statesman and Shri Ajit
Bhattacharya, Deputy Chief Editor of the Indian
Express told the Commission how during the elec-
tions they were given informal warnings by Shri .

5355S^'i2SSSE^'i*^M*/«-.;«..' 1 aiii- 1 ...^.-A^^.^^igi^^.i^,^:..,.^;:^.-;-^?^^^^

L, Dayal, the Principal Information Officer and Shri
H. J. D'Penha, Chief Censor respectively regarding
the 'type of articles and stories that were appearing
in their papers. Shri Bhattacharya also said that
Shri K. N. Prasad, Additional Secretary, Information
and Broadcasting Ministry had also informed Shri
R. K, Mishra, General Manager of the 'Indian Ex-
press' about the stories they were carrying about the
atrocities committed during the family planning cam-
paign at Rewasa and Pipali. Shri L. Dayal confirm-
ed that the Government was angry with 'Indian Ex-
press' and the 'Statesman'; Shri Shukla had told 'him
that as the 'Statesman' was likely to be partisan he
had been told to talk to Shri Sahai and convey the
Minister's impression to. him.

6.42 Shri K. N. Prasad, Additional Secretary, In-
formation and Broadcasting Ministry also admitted
having conveyed to Shri R. K. Mishra, General
Manager, 'Indian Express' the Government's views
that the publication of the article concerning atroci-
ties committed during the family planning programme
at Pipali village would inflame passions when the
election campaign was picking up momentum. He
also admitted that family planning was a very im-
portant issue in the election campaign and that certain
parties had alleged that excesses had been commitied
by the Government in the family planning programme.
He denied, however, that he was motivated by any
desire to assist the Congress Party's election
campaign.

6.43 Shri H. Karlekar of the 'Hindustan Times'
also told the Commission how Shri L, Dayal, P.I.O.
and Shri K. N. Prasad, Additional Secretary, made
insistent efforts to persuade him to publish an article
by Prof. Rashiduddin Khan, whose main theme, .
according to Shri . Karlekar, was that the Congress
Party was the one best suited to come to power. Both
Shri Dayal and Shri Prasad admitted to speaking to
.Shri Karlekar about this article. They have both
denied that any pressure was exerted on Shri Karle-
kar, and both have also said that they did not read
the article which they were pressing Shri Karlekar to
publish.

6.44 Ths Additional Secretary, Shri K. N. Prasnd,
and Chief Censor Shri D'Penha were also instructed
to keep a watch oyer the. trend and tenor of the press
and to sec how they were behaving after relaxation
of the censorship laws. According to Shri L. Dayal
tin's was done with a view to taking possible action
against such papers after the elections were over. A
daily press round up was prepared which analysed the
contents of each newspaper and this analysis was sent
amongst others to the Minister of I & B and to the
Prime Minister's Secretariat.

' 6.45 During the period . of emergency, legislation
was also enacted to make censorship part of the ordi-
nary law bT the land. Thus the Prevention of Publi-
cation of Objectionable Matter Act was passed, the
Press Council of India was abolished by an ordin-
ance and a bill repealing the Parliamentary Proceed-
ings (Protection of Publication) Act, 1956 was pass-
ed. According to Shri B. G. Verghese, former Editor
of 'Hindustan Times', the purpose of this legislation
was to institutionalise the emergency.

B. OTHER PRESSURES ON THE PRESS

1. Directorate oj Advertisement and Visual Publicity
(DAVP)

6.46 The Directorate of Advertisement and Visual
Publicity (DAVP) is the sox advertising agency for
the Government. A numb§»df public sector under-
takings also use it for advertising purposes. The
advertisement policy of the Government had been
enunciated in Parliament from time to time by Minis-
try of Information and Broadcasting. This policy
had provided that there would be no discrimination
on political ground for placement of Government ad-
vertisements. But newspapers which indulged in
virulent propaganda, inciting communal passion or
offending socially accepted conventions o'f decency or
morality were not to be used for advertisements. The
distribution of advertisements to newspapers was to
be balanced and equitable but it was not intended to
be a kind of financial assistance to newspapers.

6.47 The Government of India had decided to re-
view its advertisement policy at a high-level meeting
held in the room of Smt. Indira Gandhi, the then
Prime Minister on 26th July, 1975 which was also
attended by Shri V. C. Shukla amongst others. Even
before this, Shri Shukla at a Coordination Committee
Meeting held on 29th June, 1976 had asked the Prin-
cipal Information Officer to prepare a list of news-
papers which were to be categorised as friendly,
neutral and hostile.

6.48 According to Dr. A. R. Baji, who was the
Principal Information Officer, the categorisation ori-
ginally was done on the basis of the news and com-
ments appearing in newspapers prior to the declara-
tion, of emergency and soon after it. Subsequent-
ly a narrower study was done on the yiews reflected
in the editorial columns of newspapers between June
12 to June 26, 1975. The list wa s first scrutinised
by Shri Shukla and was then finalised at a meeting in
Shri K. N. Prasad, Additional Secretary's room and
overall rating given to the newspapers, keeping in
view its attitude, The master copy of this list was
kept in the personal custody of Shri K. N. Prasad.
According to Dr. Baji, the list was drawn up purely
on the basis of the attitude of newspapers towards
political developments and of their proprietorial affi-
liations to political parties. The grading of friendly,
neutral and hostile given to a particular newspaper
was related to its views on a particular political party.
According to Shri' K. N. Prasad this grading had
nothing to do with any political party but was purely
in response to its attitude towards the Government.

6.49 A note of Dr. A. R. Baji in the file gives an
index for categorisation of newspapers which is as
follows:

A Friendly

A + Positively

friendly

B Hostile

B -fContinuously
hostile

A— Friendly B— Less hostile

but with some than before

reservations *

C Neutral

C4-Shiftfrom
neutral position
towards positive
side

C— Shift from
neutral position
towards hostile
attitude

Some of the newspapers in the A + list are: —

1. Natun Assamiya, Assamese, Assam.

2. Amrita Bazar Patrika, English, West Bengal.

3. Nagrika, Bengali, Tripura,

4. Indian Nation, English, Bihar.

5. Hindu, English, Tamil Nadu.
6- Naveen Duniya, Hindi, M. P.
7. Hindustan, Hindi, Delhi.

■ 8. Malayala Manorama, Malay alam, Kerala.
9. Lokmanya, Marathi, Maharashtra.
10. Khaollo, Manipuri, Manipur.

In C arid C— categories are: — ,

1. Daccan Chronical, English, A, P.

2. Searchlight, English, Bihar.

3. Financial Express, English, Maharashtra.

4. Pioneer, English, U. P.

5. Gujarat Samachar, Gujarati, Gujarat,

6. Navbharat, Hindi, M. P.

7. Rajastha'n Patrika, Hindi, Rajasthan.

8. Nav Bharat & Praja Vani, Kannada, Karna-
taka.

9. Light, Malayalam, Kerala.

10. Suraj, Punjabi, Punjab.

11. Dina Madar, Tamil, Tamil Nadu.

12. Andhra Bhoomi, Telugu, Andhra Pradesh.

13. Chinar, Urdu, J&K.

14. Mehanat, Urdu, Punjab. '

In B + category are: —

1 ■. Danik Asom, Assamese, Assam.

2. Danik Sambad, Bengali, Tripura.

3. Poona Daily News, English, Maharashtra.

4. Indian Express, English, Tamil Nadu.

5. Sandesh, Gujarati, Gujarat.

6. Pradeep, Hindi, Bihar.

7. Vir Pratap, Hindi, Punjab.

8. Deshabhimani, Malayalam, Kerala.

9. Swadesh, Hindi, M. P.

10, Kannada Prabha, Kannada, Karnataka,

11. Navabharat, Marathi, Maharashtra.

6.50 This is only a representative list and there were
a large number of newspapers and other journals in
virtually all languages which were categorised as B

orB +■ ' - '

* 6.51 Oflhe national dailies published in English
from Delhi'; the 'Hindustan Times' and 'Times of India'
were given A and A-grading and 'Statesman' and
'Indian Express' B grading respectively.

6.52 According to Shri S.M.H. Burney, who was
Secretary in the Ministry of Information and Broad-
casting these lists were prepared on the basis of
instructions received from the Minister. These were
oral orders of the Minister, and he communicated them
in writing to Shri K. N. Prasad, who subsequently got
the lists prepared. The list of newspapers and maga-
zines was to be of those who were in favour of I he
Government and also of those who were anti-Govern-
ment and anti-Prime Minister. Shri Burney admitted
that he did not know the kind of assessment made by
the P.I. O., but he was clear that it meant opposing the
Government and not the Congress Party, though he
could give no idea as to the nature of the criticism of
the Government as distinguished from that of the party.

6.53 Shri V. C. Shukla while admitting that he had
given directions for preparation of these lists said that
the attitude of the newspapers was to be adjudged in
the light of their general cooperation with the Govern-
ment. According to him, Dr. Baji's understanding of
the task entrusted to him was wrong and Government
merely intended to judge a newspaper's cooperation
from the background of its attitude towards the Govern-
ment and particularly of the adjustment that it had
made during the emergency.

6.54 However, from the evidence which is available
on the flies of the DAVP it is evident that political
considerations was one of the criteria for giving adver-
tisements. Thus 'Dastan-e-Wafan' which is an Urdu
Journal published from Delhi had its advertisements
resumed after notice had been taken by Shri K. N.
Prasad and Shri V. C, Shukla that this journal had
ceased to follow a pro- J ana Sangli policy and was now
supporting the Congress.

6.55 Similarly in the case of 'Lok Raj' of Bhav
Nagar, Gujarat, advertisements were stopped when a
complaint was received that this publication was sup-
porting Congress (O) policies. Subsequently an inquiry
was made through the PIB and during the course of
this inquiry it was found that it was a pro-Congress
paper, and Shri Shukla ordered resumption of advertise-
ments to this journal on 15th May, 1976.

6.56 'Alai Osai' a Tamil Daily was being used on
a restricted basis by the DAVP because it was allegedly
Pro-DMK. In February 1976 Shri M. Bhaktavatsalam
requested Shri V. C. Shukla that 'Alai Osai* should
be given more advertisements. Accordingly the num-
ber of advertisements to this daily was stepped up,
In April 1976, however, on receipt of a complaint from
Shri V. Vishwanathan, M.P., that the 'Alai Osai' was
staunchly pro-DMK, the issue of advertisements to
this daily was stopped. In October 1976 on receipt
of a letter from Shri E.V.K, Sampath, Vice-President

.-■^-^WJffi^tfJ&IK^

e/rirl ;■ '-:-^> \- : . .'. l.V^ ,;i--'-.. ;' -'.■-■ ji*;^'-? .-V.v. -. L

of the Tamil Nadu Congress Committee that some
Congressmen had purchased this daily, advertisements
to this daily were resumed. A number of official;

weeklies of the Congress Party were given extensive

advertisement support, while that to official journals of
the opposition came down. The following table illus-
trates the amount of advertising support given to
Congress Party journals vis-a-vis some of the opposi-
tion party journals :

Name of the Party

Name of the
Journal

Period

Circula-
tion

Expendi-
ture
(Rs.)

1. Congress Party

1. Socialist
India

1974-75
1975-76
1976-77

1881
1062
3521

3,188

18,647

1,11,740

2. Socialist
Bharat

1974-75
1975-76
1976-77

3660
2902

.14,918
1,05,236

3. Sab Saath 1974-75
1975-76
1976-77

2400
1443

1443

2,718

6,555
52,623

2, Communist
Party of India

I . New Age

1974-75
1975-76

1976-77

12,783
12,340
14,496

3,668
21,250

11,106

2. Hayat

1974-75
1975-76
1976-77

1866
1883
1883

736
3,366
2,879

3. Communist
Party of India
(Marxist)

1. Ganashakt

i 1974-75
1975-76
1976-77

12,8911
12,891
Not used
between
1-2-76
to

1^957

11,442

1,524

:;';■/ .'

23-3-77,

4i| -Bhartiya Jarta
Sangria

1. Mother
Land

1974-75
1975-76
1976-77

14,335
Publicatio
ceased

13,728
n

5. Praja Socialist
■ Party

1. Janata

1974-75
1975-76
1976-77

1477

1587

Not used

450
98

■ 6.57 Thus it is apparent that contrary to. the policy
enunciated by the Government on the Floor of
Parliament, political considerations were taken into
account while releasing advertisements.

6.58 The Government during this period utilised
its advertising policy as a source of financial assistance
or denial of financial assistance to newspapers etc. in
complete variance with the policy which it had
enunciated on the Floor of the Parliament. News-
papers and journals which were critical of the
Government's policies were denied advertisements
whereas others like Amrit Bazar Patrika and National
Herald which were regarded as being supporters of
Government policies were given advertisements beyond
their legitimate due.

6.59 Thus according to Shri Romesh Thapar, Air
India stopped giving advertisements to 'Seminar'
magazine as soon as the order of pre-censorship was
issued on 'Seminar' for some articles containing
allegedly objectionable material Soon after ..a private
sector firm told Shri Thapar that its management had
received messages that advertisements should not be
released to 'Seminar'.

6.60 Shri Rajmohan Gandhi has also stated that
soon after the Government started . taking adverse
notice of 'Himmat' magazine all advertisements from
DAVP and other Government agencies like Banks
and Airlines were stopped. When Shri Rajmohan
Gandhi inquired from Air India, the Bank of
Maharashtra and Dena Bank as to why his
advertisements had been stopped, he was told that
the Government- had placed him on the prescribed
list.

6.61 On the other hand, Antrim Bazar Patrika
was categorised as A plus (meaning positively
friendly) according to Dr. A. R. Baji, in the list of
'friendly, hostile and neutral' newspapers. Dr. Baji
told the Commission that A plus, positively friendly,
grading was given to those newspapers which went all
out to support the party in power or liie Government.
To use Dr. Baji's phrase, they were 'whole-hoggers'.
Amrita Bazar Patrika was given a mid-term revision
of rates by Shri V. C. Shukla w.e.f. 9th October, 1975.
According to Shri Shukla this was done on the specific
recommendation of DAVP. The DAVP (Shri Sethi)/
has noted on the file in October 1975 that Amrita
Bazar Patrika had asked for a higher rate. In
August, 1975 the DAVP had recommended that
Amrita Bazar Patrika should be given the same rate
as that of the 'Hindustan Times' as the circulation of
combined edition was the same as the 'Hindustan
Times*. When the DAVP made a note on the file
he also said that the circulation of Amrita Bazar
Patrika had come down by 5,000 copies since its
recommendation of August, 1975 and that normally
upward revision of rates is not agreed to unless there
is a corresponding increase in circulation. The
quantum of advertisement released to this newspaper
in 1-975-76 was Rs. 9,22,313 as against Rs. 4,57,340
in 1974-75. In 1976-77, the quantum of advertise-
ments showed a further increase to Rs. 10,10,696.
Shri V. C. Shukla told the^ Commission that he
regarded the request of Amrita Bazar Patrika for
increase in quantity of advertisements as a 'claim'
on the Government. He also said that it was
supporting nationalistic policies.

6.62 Similarly, National Herald was given an A
plus rating and quantum of advertisement given to
the National Herald Delhi Edition alone is indicated

in the following table : —

1974-75 1975-76 1976-77

Circulation
Amount (Rs.)

1 i ,048
17,298

10,880
66,327

10,831
1,32,917

6.63 For all editions of National Herald the figures
regarding quantum of advertisements are as follows:'

1974-75

Rs. 2,51,304

1975-76

Rs. 4,99,589

1976-77

Rs. 8,70,555

6.64 According to Shri Shukla the Government
had laid down certain criteria and they tried to apply
them as fairly as possible and to the best of jts
ability. Shri Shukla also did not comment on
individual cases and. said that Commission could

■42

come to its own conclusions from- the record. He
also said that they may have applied the guidelines
wrongly and, therefore, erred,

6.65 On 15th September, 1976, a policy note was
issued by Shri'K. N. Prasad, Additional Secretary,
which he said was issued after consulting the Minister
Shri V. C. -Shukla. The policy note authorised the
DAVP to canalise advertisements of all Central
Government Ministries, Departments, Public Sector
Undertakings and nationalised autonomous bodies.
It was realised that the State Governments may not
agree to have their advertisements canalised through
the DAVP but it was noticed that the .Centre could
advise them to discontinue advertisements to delisted
newspapers. The DAVP was also directed to ensure
that whenever any paper was delisted, the publication
of those advertisements which had already been
released should be prevented. The DAVP was also
asked to tactfully explore the possibility of private
advertising agencies denying advertisements to delisted
newspapers. Shri Prasad could not explain the basis
on which the listing or delisting was done by the
DAVP. He also admitted that he did not make, any
inquiry from the DAVP whether declaration made on
the Floor of the Parliament by the Government was
being violated either in words or in spirit when he
made this recommendation.

6.66 Regarding the possibility of private advertising
agencies denying advertisements to delisted news-
papers. Shri Prasad said trial the DAVP failed to
persuade the private agencies to fall in line and,
therefore, Shri Shukla himself met the representatives
on 5th February, 1977. The minutes of this meeting
which was held on February 5, 1977 reveal that
private advertising agencies agreed to fall in line
with the Government's policies on release of
advertisements.

6.67 From the above it is evident that the
Government's assurance on the Floor of the
Parliament that political affiliations would not be
taken into consideration while giving advertisements
and the advertisements would not be regarded as
source of revenue or financial assistance to news-
papers, were both disregarded in the actual
implementation of the policy. The liberal grant of
advertisements, to so-called friendly periodicals raised
the total expenditure of DAVP advertisements on
newspapers from Rs. 1,42,30,238 in 1974-75 to
Rs. 2,20,68,897 in 1975-76 to Rs. 2,79,45,942 in
; 1976-77. During the same period 89 newspapers
and periodicals were denied advertisements mostly on
political grounds for varying lengths of time.

2. Formation and Functioning of 'Samachar'

6.68 The first indication that the Government was
intending to reorganise the existing four news agencies,
namely, U.N.I., P.T.I., Hindustan Samachar and
Samachar Bharati was apparent at Smt. Indira
Gandhi's high-level meeting of 26th July, 1975.
Subsequently at another high-level meeting held by
Smt. Gandhi on August 12, 1975 which was also

attended by Shri V. C. Shukla, Minister for I&B, the
pros and cons of restructuring the news, agencies into
a statutory body or trust were considered.
Accordingly the Ministry drew up an ordinance for
approval of. the Cabinet for merging the news agencies
into a single statutory body. The Cabinet did not
accept the ordinance and decided that the agencies
should be made to merge without recourse to law
and other methods should be tried.

6.69 According to Shri L. Dayal, who was the
P.I.O., Shri Shukla interpreted the expression 'other
methods' to mean that pressure would be put on the
news agencies by way of All India Radio no longer
subscribing to the news agencies, by not hiring
teleprinters of the news agencies and vigorous
recoveries of the dues of the Government. According
to Shri Dayal the inference could be drawn from
subsequent events that the intention of having these
news agencies merged into one unit was to control
their functioning and that decisions regarding this
merger was taken at the Prime Minister's level.
According to Shri Shukla no decisions were taken in
the Prime Minister's meeting but the discussions held
there helped them to clarify their minds as to what
should be the best form to achieve the objective.
According to him he had understood the Cabinet's
decision to try 'other methods* to mean persuasion,
mobilisation of public opinion, opinion of professional
bodies, opinion in Parliament and opinion of ' the
workers of the news agencies.

6.70 He also said that it was purely coincidental
that the teleprinter connections to Government offices
Were disconnected when discussions regarding merger
were going on. He also said that Government showed
indulgence to the agencies in not recovering the dues
of the P&T Department because of their tight financial
position. He said this indulgence was a form of
patronage and when they decided that there would
be no more patronage the P&T Department started
realising its dues. He, however, did not know the .
exact terms of the agreement between the agencies
and the P&T Department.

6.71 As regards AIR dues, Shri Shukla said that
the agreement with the agencies had expired. A new
agreement was negotiated and the terms settled. The
agreement was, however, not signed and whatever
payments were made, were made on an ad hoc basis.
Considering that the ways and means position of the
agencies was bad, a payment of Rs. 5 lac was made
to them on a purely ad hoc basis.

6.72 Shri Mirchandani, Editor and General
Manager of U.N.I, said that the rejection of fhe
ordinance was taken as a set-back by Shri V. C.
Shukla and therefore he resorted to harassment of
the managements of the news agencies to force them
to merge. Shri Mirchandani said that he had
consistently opposed the merger and he had personally
displeased Shri V. C. Shukla because he believed that
he was instrumental in getting the Cabinet to reject
the proposal. He had gone so far as to meet
Shri Sanjay Gandhi in his attempts to stall the merger,
Hence he was forced into, retirement on Shri Shukla's
insistent demands. Dr. Ram Tarneja, Chairman of

iViv'l?*' ;• ■ : *yi,-. •.•<«»:"-.-.■„ t£ >.,■ - .' ,.:-.- ' ■::.-. Uw <K; »r«i ■:'-: SMI£>\-i; ;■;::;,

. £,„, ; ,,„-j....,,.- ; ~ , :-_:;. L ^ :lll :. ::i J^^ A ;::^^..^l : ;... t . . ^.Hii.-.tii,,;..;^!,..;^!;; •:.■■:« SuiK*. :J ,.SU^^iii!:iii^..i-.^ij.. .

the UNI confirmed that he was put to undue pressure
from. Shri Shukla for obtaining Shri Mirchandani's
■ retirement,

6.73 According to Shri Shukla, he was aware that
Shri Mirchandani had opposed the merger, but said
that this was because oC his long service in UNI,
Shri' Mirchandani had become the de facto
administrator and had developed vested interests in
the continuance of the UNI. Shri Shukla also said
that it was felt that a person who had no faith in a
unified national news agency would be a hinderance
to a unified set up.

6.74 Shri P. C. Gupta, who was Chairman of the
Board of Directors of PTI, Dr. Ram Tarneja,
Chairman of the UNI Board have both stated that
pressure was put on them by cutting off teleprinter
lines, non-payment of All India Radio dues, adverse
publicity given in the Press regarding their allegedly
outstanding dues, etc. Shri Shukla admitted that
-from the time Cabinet directed him to try 'other
methods' on December 13, 1975, to the time they
bore fruit on January 24, 1976, that is, a period of
1 month and 11 days, the agencies were compelled,
induced or persuaded by so-called 'other methods'
to join in the scheme of merger; but he said that it
was not correct to say that the entire thing materialised
in one month and 13 days, that it was the final stage
of the effort that took shape after the Cabinet meeting
of December 13, 1975.

v 6-75 The functioning of Samachar during the'
Emergency both administratively and editorially was
Supervised by Government. According to '.
Shri G. Kasturi, who was Chairman of the Samachar
Board, thure was no interference of the Government
in the working of Samachar, but from time to time
the Government and Shri Shukla made suggestions
which one had to consider because the Government was
in it from the very beginning and they required its
assistance for putting Samachar on its feet. However,
from the documents available with the Ministry • of
Information and Broadcasting it is apparent that
Shri Kasturi did consult Shri K. N. Prasad regarding
advice he had given to Shri Mohd. Yunus about the
constitution of three Samachar Committees. Similarly,
Shri Prasad had got agenda points cleared by
Shri Mohd. Yunus and Slid V. C. Shukla, so that
Shri Yunus could take further action upon them at
meetings of the Managing Committee of the Samachar.
The proceedings of the Samachar Board meeting were
also being sent to Shri K. N. Prasad. Shri W. Lazarus,
who was the General Manager of the Samachar also
admitted having supplied lists of Samachar personnel
for verification by Government agencies. Shri Lazarus
also said that he was frequently in touch with
Government on matters relating to finances but he
did not take any direction from the Government on
any matter.

. 6.75A Shri P. C. Gupta and Dr. Ram Tarneja, botfi
members of the Samachar Committee stated that
Samachar was being ordered continuously in respect
of various matters concerning its administration by
the Government.

6.76 As regards editorial control, various members
of the editorial staff, Shri P. S. Kasbekar,
Shri C. P. Maniktala, Shri C. K. Arora,
Shri D. V. Desai and others have testified that
instructions were received from the Government and
from other .authorities about giving proper coverage
to Government and Congress-,Party activities, and also
to keep coverage of opposition activities on a low
key. In particular, during the election campaign this
imbalance of news was accentuated. The type of
stories put out by Samachar can be seen from the
original stories and their edited versions. Photo
copies of a- few illustrative examples are attached as
appendices to this Chapter. Shri Lazarus, Member
Editorial and General Manager of the Samachar and
Dr. Raj K. Nigam, Executive Member of the Samachar
Board used to attend coordination meetings which
were held by Shri S. M. H. Burney in the Ministry
of Information and Broadcasting during the election
campaign.

6.77 Shri K. N. Prasad, Additional Secretary, stated
that while he was not aware of any interference by
the Ministry in the editorial freedom of Samachar,
there would be instances of Samachar receiving
instructions in regard to news meant for censorship
and Press release. Shri Lazarus denied that he had
ever given instructions to play up Government and
Congress Party news arid to keep coverage of
Opposition parties on a low key. He only issued
instructions that sensitive copies should be referred
to him and he never regarded Samachar as a mere
channel for carrying out Government versions- of
stories. However, certain instances of tailoring of
stories to suit the Government's needs, for example,
the story regarding Shri Jagjivan Ram's resignation
from the Congress, were put to Shri Lazarus and he
affirmed that this had been done at the instance of
Shri Shukla.

3. Harassment of Journalists

6.78 To enable the Press to cover the activities
of the Government accreditation to Government of
India is granted to correspondents and news camera-
men based in Delhi. The accreditation was- governed
by two sets of rules for correspondents and camera-
men respectively. In addition the decision of the
Central Press Accreditation Committee was treated as
a convention and was followed in deciding individual
cases. In February, 1976, the Government
reconstituted the accreditation - committee and the
number of Government nominees was raised from
two to three in a total committee of 1 1 .

6.79 During the period, following declaration of
Emergency, accreditation of. a number of correspon-.
dents was terminated and a bulk of these 'decisions
was taken as a part of a review which was endorsed
by the Central Press Accreditation Committee at its
meeting held in February, 1976. At this meeting
number of deletions were suggested by the then
Principal Information Officer, Dr. A. R. Baji, on the
basis of a decision of the Government.

6.80 According to Shri K. N. Prasad in February
1976, Shri Shukla gave cyclostyled list of Accredited
Correspondents and he was ordered that a record

check should be made of those who were associated
with banned organisations. Shri Prasad got this done
from the Intelligence Bureau and then returned the
list to the Minister. A note on the file by
Shri Prasad shows, that the list was seen by the
Minister and he approved of the principles arid
guidelines to be adopted for granting accreditation.
Thirty-three correspondents were dis-accreditated,
the reasons for some of them were the adverse
verification reports and for others their anti-establish-
ment stances. All these cases were approved by the
Minister. Shri Shukla admitted that he had given
instructions for getting the verification of the
antecedents of correspondents done.

6. 81 Shri Prasad also admitted to having charactet
and antecedents of a number of journalists verified
by the Intelligence Bureau. He said that this was
done at the instance of the Minister, but did not
know the reasons why it. was done.

6.82 As regards foreign correspondents, a number
of restrictions were placed on them to make them
conform to Government policy; for instance, they
had to sign a bond agreeing to abide by the
precensorship laws. According to Shri Shukla,
Minister for Information and Broadcasting, it was the
Government policy that the law should apply equally
to both foreign correspondents as well as Indian
correspondents and if they wanted to operate in India,
they had to conform to the laws of the land.

6.83 The Indian representatives of foreign journals
were subjected to great harassment, for example,
Shri Ramanujam, who was the. representative of the
'Newsweek' magazine of USA had his telephone cut,
his accommodation taken back and his accreditation
withdrawn in spite of the fact that 'Newsweek'
expressly told the' Government of India that
Shri Ramanujam was not responsible for any
participation in any 'Newsweek' reporting from India
since censorship was imposed.

C. FUNCTIONING OF GOVERNMENT MEDIA
UNITS

6.84 The Government Media Units had two main,
functions during the Emergency. They were at once
a source of patronage and also they were used for
building up the image of a political party and a few
of its leaders.

1. DAVP

6,85 The DAVP was used on a large scale for
giving advertisement support to various souvenirs
brought out by the Congress Party. Opposition
parties were denied any such patronage Thus
during the year 1974-75, 1975-76 and 1976-77, the
Congress Party and its various wings received
advertisement support from the DAVP alone worth
Rs. 3,868, Rs. 52,615 and Rs. 80,325, respectively;
whereas the opposition parties during the same period
received Rs. 1,403, Rs. 1,700 and Rs. nil, respectively.

6.86 Not merely was the Congress Party given
extensive advertising support but there was an instance
when rates per page for souvenirs were increased after
they had been agreed upon and the souvenirs printed.
Thus, the rate fixed for advertisements for 'the
souvenirs brought out on the occasion of the All India
Congress Committee meeting at Delhi was originally
Rs. 1,000 per page. Twenty advertisements were
released at this rate on the orders of Shri V. C. Shukla
on May 18, 1976. On June 15, 1976, the Delhi
Pradesh Congress Committee submitted a bill for
Rs. 40,000 at Rs. 2,000 per page. Shri C. K. Sharma,
Private Secretary to Shri V. C. Shukla, instructed the
DAVP to make the payment at the enhanced rates.
He said that he had instructed the DAVP to make the
payment after he had consulted the Minister.

6.87 Shri Shukla, the then Minister for Information
and Broadcasting, stated that, regarding giving of
advertisements for souvenirs, the Government had
strictly followed the guidelines laid down to the best
of its ability and that he had nothing more to add.

2, All India Radio

6.88 According to Shri S. C. Bhatt, Director, News
Services Division, All India Radio, rigid constraints
were imposed on All India Radio after the imposition
of Emergency. He said that throughout the
Emergency period it was the Government's policy to
play up the speeches of Smt. Indira Gandhi and heT
son, Shri Sanjay Gandhi. He stated that written a'rrd
unwritten instructions were frequently received by AH
India Radio from the Minister himself and sometimes
also directly from the Prime Minister's Secretariat.
In,, all, Smt. Gandhi's prpnounc.errients were carried
*jn47Lgccasions on.jiew.sreels.and Samac har Darshan'
programmes arid, Shri. J>anjay_ GandhLfigured 24 times'
on.-4heae.^r)rogrj.irjrnes„ Besides, All India Radio"
gave..wide publicity to Shri Sanjay Gandhi arirJ
L9.2_itetns we're 'carried on Shri Sanjay Gandhi in the
main news -bulletins broadcast between January 1
lS2£_a»d January 18, 1977. A few illustrative 1
examples of the"- type of coverage on Shri Sanjay
Gandhi are given below ; —

(i) "Earlier on his arrival in Bhopal,
Shri Gandhi was given a rousing welcome
by a large crowd of men, women and
children".

[A.l.R. News: February 26, 1976—2100 Hrs.J.

(ii) "Mr. Sanjay Gandhi was taken in a big
procession through the streets of Guntur to
the police parade ground",

[A.l.R. News: March 21, 1976—0810 Hrs,].

(Hi) "Hundreds of thousands or people lined up
the roads in Tirupati and Tirumalai to
cheer Mr. Gandhi".

[A.l.R. News : March 21, 1976—2100 Hrs.],

(iv) 'The Youth Congress leader Mr. Sanjay
.Gandhi had discussions with officials in
'Agra today on plans to beautify and clean
Me historic city", "earlier on arrival in Agra

-;:}.-. I - .J. ." . * L . - * I *.». .iJWi,

Mr. Gandhi was given an affectionate
welcome by a big crowd".

[A.I.R. News : May 2, 1976—2100 Hrs.].

(v) "On arrival at Bombay Airport Mr. Sanjay
Gandhi was accorded a big welcome. The
Maharashtra Chief Minister, Mr. S. B.

Chavan, his Cabinet colleagues and

many Congress and Youth Congress leaders
received him at the Airport. He was
profusely garlanded on behal'f of several
organisations. Several organisations gave a
grand welcome to Mr. Sanjay Gandhi all
along the route from the Airport."

■ [A.I.R. News : October 29, 1976—2100 Hrs.].

(vi) "The AIR correspondent says that lakhs of
people turned up in Karna'l to greet Mr.
Sanjay Gandhi. The town wore a festive

look".

[AJ.R. News : January 11, 1977—2100 Hrs.].

6.89 Shri Bhatt also said that the AIR news was
used for broadcasting inspired news denigrating Con-
gress leaders who had fallen out of favour with the
ruling coterie. Thus, a series of stories condemnatory
of Smt. Nandini Satpathy were broadcast just before
President's Rule w,as imposed in Orissa.

6.90 The slant against the opposition was so obvious
;that in December, 1976, AIR bulletins devoted 2207
lines to the spokesmen of the Congress Party as against
34 lines to the opposition. In December, 1974, the
same figures were 571 and 522 respectively. Accord-
ing to Shri Shukla, most of the spokesmen of the Con-
gress Party were Ministers and hence there was nothing
wrong in publicising their views on matters concerning
the Government.

• 6.91 According to Shri Bhatt, during the election
campaign, the All India Radio distorted news in
favour of the Government and the ratio of news
between the. Government and the opposition parties
went up to as much as 8.5 : 1. The Minister was
frequently giving instructions regarding the type and
scope of the news which should be carried. The All
India Radio News was subjected to approval by the
Secretary Shri Burney and the Additional Secretary
Shri Prasad before it was put out on the air.

6.92 This came about because Smt. Indira Gandhi
had sent for Shri Burney and complained to him
that the Ministry of Information and Broadcasting was
not managing the press well and that AIR/TV were
also not functioning properly. After receiving these
comments of the Prime Minister, Shri Burney directed
that news bulletins would be cleared by him or Shri
K. N. Prasad.

6.93 According to Shri Shukla it was at his instance
that instructions were issued to Shri Burney that moni-
toring, of AIR news should be done by him or by
Shri Prasad as Shri Shukla had received some com-
plaints that the coverage, in news bulletins of AIR was
not appropriate to Government.

Sm HA/77— 7

6.94 Shri Shukla also admitted to having talked
to the Director General of All India Radio to give him
the story regarding the alleged attack on Shri Sanjay
Gandhi at Amethi on March 14-15, 1977. Shri
Shukla also issued directions that reactions of impor-
tant Congress leaders to the attack on Shri Sanjay
Gandhi should be obtained and broadcast the follow-
ing morning. Shri Siiukla further stated that he had
instructed his staff members at Raipur to indicate to
AIR that the news regarding the alleged attack on
Shri Purshotam Lal Kaushik, the rival candidate at
Raipur may not be reported as other instances of poll
violence were not reported.

6.95 One hundred forty new posts of part-time
Correspondents had been created in the AIR in March,
1976. As a rule in the past, part-time Correspondents
were appointed from amongst those already serving in
a newspaper and the appointment was made by the
Director News Services. For filling up these new posts
the method and criteria for appointment were changed
on April 23, 1976. The appointment was vested in a
committee consisting of Joint Secretary (Information)
and Joint Secretary (Broadcasting) of the Ministry
and the informal approval of the Minister had to be
obtained before the appointments could be made.

6.96 After the change of criteria three part-time
Correspondents were appointed to AIR, all of whom
ivere office bearers of the Congress party. Shri Shukla
said that he did appoint these people its part-time
Correspondents even though his staff had told him
about their political backgrounds, but he said that it
would be unwarranted to say that these people were
appointed because they were members of the Congress
Party. He said that as a matter of policy the bar ori
members of political parties being appointed was re-
moved, and if a person was otherwise suitable he
could be appointed. He, however, could not recall
any instance of a person belonging to another political
party being appointed to this post.

6.97 Shri G. L. Vohra had been working as All
India Radio's part-time Correspondent at Raipur from
October 1, 1963. According to Shri S. C Bhatt, his
performance was generally considered satisfactory and
hi? contract was renewed from time to time. On March
19, 1977, the Special Assistant to the Minister for
Information and Broadcasting, Shri V. S. Tripathi
spoke to Shri Bhatt and told him that the Minister
had desired that Shri Vohra's services should be termi-
nated forthwith. Shri Bhatt also said that Shri Tripathi
had told him that Shri Vohra had covered Smt. Viiaya-
lakshami Pandit's election speech at Raipur on March
17 for the AIR regional bulletin. Shri Bhatt told Shri
Tripathi that AIR's story was based on Samachar report
and not on Shri Vohra's coverage but Shri Tripathi
said that the Minister's orders had to be carried nut.
Shri Tripathi confirmed that he had received instruction
from the Minister for terminating Shri Vohra's services
but he said that he did not know why Shri Vohra's
services were terminated and he in fact said that it
would be wrong to suggest that his services were termi-
nated because he had covered the speech of Smt.
Vijayalakshmi Pandit. He further said that he had

spoken about the coverage of §mt, Vijayalakshmi
Pandit because he was told by the Private Secretary
to Minister, who was at Raipur that he should obtain
the details from Shri Bhatt about the coverage given to
Smt. Vijayalakshmi Pandit's public meeting at Raipur.,
He said that he had ascertained from the Minister as to
why Shri Vohra's services had been dispensed with
and Minister had told him that it had been decided to
appoint a full-time Correspondent at Raipur instead of
a part-time Correspondent.

6.98 Shri V, C. Shukla said that after the elections
were announced and he had gone to Raipur various
reports and, complaints started coming in and he had
mentioned these to Shri Tripathi, who knew Shri
Vohra. Further a decision had already been taken that
Raipur All India Radio should have a staff correspon-
dent rather than a stringer and this decision had been
taken much before the elections. Therefore, when
during the election campaign reports regarding Shri
Vohra had reached him, he had decided that no action
should be taken to remove Shri Vohra during the elec-
tion campaign lest it may be misunderstood that it was
done for some reasons connected with elections. There-
fore, he told Shri Tripathi after the polling in his consti-
tuency (Raipur) to instruct Shri Bhatt to remove Shri
Vohra as All India Radio's part-time Correspondent
at Raipur. Shri Shukla further stated that though the
Janata Party Government had restored Shri Vohra and
gave to him the post of part-time Correspondent, soon
after this they again removed him and posted, in accor-
dance with the decision taken earlier, a staff correspon-
dent of All India Radio at Raipur and that Shri Vohra
may have been reinstated at the most for a month or
two. He said that Shri Vohra's coverage of Smt.
Vijayalakshmi Pandit's meeting was quite fair and no
exception could be taken to that coverage.

3. Doordarslian

6.99 The coverage of Shri Sanjay Gandhi by Door-
darshan went up after December, 1975. In all, a sum

;of Rs. 8,33,055 was incurred during the period of
"Emergency on coverage of Shri Sanjay Gandhi. Shri
Shukla justified the extraordinary publicity given to
Shri Sanjay Gandhi on the ground that at that time
even private media were paying considerable attention
to the doings of Shri Sanjay Gandhi.

6.100 As regards the coverage of the Prime Minis-
ter, both over AIR and Doordarshan. Shri Shukla
stated that it was the normal function of the Govern-
ment Media Departments to' cover the activities of the
Government and its leader, the Prime Minister.

4. Films Division

6.101 A number of films were produced by the
Films Division to project the image of Shri Sanjay
Gandhi not onlv as a Youth leader but as a leader in
his own r'ght. The decision to nroduce fh^s^ films was
taken at meetings presided over by Shri S. M. H. Burney
at which was present Shri Navin Chawia, Secretary to
the Lt. Governor of Delhi.

6.102 According to Shri. K. K. Kapil, Joint Chief
Producer of Fums Division, it was Shri S. M, H.
Burney who had directed him to produce these films so
that the personality of Shri Sanjay Gandhi could be
brought out in an oblique and subtle manner and that
he should get in touch with Shri Navin Chawia, who
was virtually nominated as consultant for these films.

6.103 According to Shri Navin Chawia, he had! play-
ed a role in production of these films at the instance
of the Lt. Governor of Delhi, who had spoken to
Shri S. M. H. Burney for preparation of publicity' films
for the Delhi Administration. Shri Burney had then
formed a working group for this matter.. Shri Chawia
participated in this as a representative of the Lt. Gov-
ernor, Shri Navin Chawia said that he used to see the
films and clear them at the instance of Shri Burney.
He denied that he ever directed anyone to project Shri
Sanjay Gandhi as the main personality in these films
or as a hero of the projects depicted in these films. On
a suggestion from Shri Kapil in a casual conversation
he had agreed with him that films on Shri Sanjay
Gandhi should be preserved and they should not.be
wasted. He recollected that this matter was taken up
in the group meeting.

5, Directorate of Field Publicity and the Song and
Drama Division.

6.104 The other Government media i.e. Directorate
of Field Publicity, Song and Drama Division, were also
asked to project the image of Smt. Gandhi and the
Congress parly as testified to by Dr. A. R. Baji, Direc-
tor of Field Publicity and Shri Birendra Narayan,
Director, Song and Drama Division. Dr. Baji, who was
earlier the Prncipal Information Officer had also been
directed by Shri Shukla to contact the Editor of the
'Statesman' newspaper and asked him to give full
publicity both photowise and newswise to Smt, Gandhi
and to Shri D. K. Barooah, the then Congress Presi-
dent. According to Shri Shukla, it was the normal fu'nc- '
tion of the Principal Information Officer to project the
image of the leader of the Government and he did not
see anything wrong in it. '

6. Multi-media Campaigns

6.105 A number of multi-media campaigns were
launched during the Emergency to coincide with im-
portant milestones in Smt. Gandhi's career. The most
important were the "Decade of Achievement" and "The;
Year of Fulfilment", The former was organised when
Smt. Gandhi had completed ten years in power as
Prime Mnister. Various Government media depart-
ments were given detailed instructions on how this was
to be publicised. Thus, Directorate of Field Publicity
was to screen extensively the seven films that it had'
on the Prime Minister, and also to obtain in sufficient
numbers the taoes of Smt. Gandhi's broadcast of
November 11, 1975 for extensive publicity in semi-
urban and rural areas. The Films Division also prepar-
ed a film, "A Day with fh*i Prime Minister". The ATR
was directed to select 200 quotations from Smt.
Gandhi's speeches and to put but five to ten of these
quotations daily on the air. The Publications Division

tt-x~

"■■-^.--J^Vfe^i^Ss^*'.^.. ^ '-:■■' ■^^^;-= : J ;^:.> ,'j' ;- ■/l. . .... :/:.-;, ^ ^vV-'-'^^^^'^i.^^^^^^.^-.

was directed to boost the sales of Smt, Gandiii's books
add to publish informative and interesting sketches
with photograph of Smt. Gandhi in various journals

and periodicals.

6.106 According to Shri K. N. Prasad the emphasis
was not to justify the emergency but on the gains of
the emergency. He also said that he was never in touch
with the All India Congress Committee or Shri Yashpal
Kapoor on this subject, but that at one of the meetings
held in Shri Dhararn Vir Sinha, Deputy Minister's
house on the 'Decade of Achievement' he found Shri
Yashpal Kapoor there who gave out a complete pro-
gramme of what the Congress Party was doing. Shri
Prasad took it and kept it on the file but he never got
in touch with Shri Kapoor or anybody in the Congress
Party to coordinate or do anything.

6.107 Shri Shukla denied that these compaigns were
organised to build Up the image of Smt. Gandhi. He
said that these were organised to build up and project
the image of the Government and those who were fun-
ctioning within the Government and nothing in this
was done "to project the image of throw up the ;
image of anybody who was not functioning within the
Government".

6.1 OS During the election campaign another multi-
media publicity campaign was launched entitled "The
Campaign 1977, the Content Strategy". According to
Dr. N. Bhaskar Rao, a consultant to the Ministry of
Information and Broadcasting, on the evening of Jan-
uary 19, 1977, Shri Hit Prakash, Joint Secretary in
the Ministry of Information and Broadcasting had asked
him to prepare a note on the basis of instructions that
he had received . from the Secretary on the election
campaign. Dr. Bhaskar Rao met Shri S. M. H. Barney
the next day, i.e., January 20, 1977. Shri Burney in
addition to what Shri Hit Prakash had suggested wan-
ted Dr. Bhaskar Rao to identify the areas where the
then Opposition parties were having a strong . holds
and to suggest methods for intensifying campaign in
those areas. Shri Burney himself identified some areas
and he also wanted that some of the achievements and
qualities of Smt. Indira Gandhi should be highlighted
in his campaign. He further directed Dr. Rao to pre-
pare media-wise activities for this campaign. Dr. Rao
accordingly compiled a note and gave copies of it to
Shri Burney, Shri K. N. Prasad and Shri Hit Prakash
on January 21, 1977. The original of the note was
identified by Dr. Rao during the Commission's hearings.
This contained a list of 30 specific themes associated
with Smt. Gandhi and the Emergency which would

appeal easily to the people and publicised the achieve-
ments of the Government, He also gave suggestions tb
counteract likely/potential arguments of the Opposi-
tion some of which could be forestalled while others
could be countered as and when they became issues.
He had also admitted to have identified towns and cities
where the Opposition was strong but suggested that
this could be further narrowed down by local field
units after consulting the other wings of the Govern-
ment and party leadership. He had also suggested that
responsible persons in the Ministry should monitor
the various kinds of campaign issues raised by the
Opposition so that corrective measures could be
taken.

6.109 Dr. Bhaskar Rao has further stated that a few
days after this note was prepared Shri Hit Prakash met
him in Shri Gopalakrishnan, Director (IP), I&B Minis-
try's room and told him that the earlier note needed
revision. Shri Hit Prakash told him that as the note
had been specifically mentioned in the minutes and
could not be withdrawn altogether another had to be
substituted for it. Subsequently, Dr. Rao prepared an-
other note. Dr. Rao admitted to the Commission that
he had realised that there was a complete identity
established in his report between the Government and
the party but he had done it under the impression that
he had been merely asked to give some points for the
meeting and that this note would not be distributed.

6.1 10 Shri Gopalakrishnan told the Commission that
when he read Dr. Rao's note he felt that it was not a
proper note to be issued and he had gone to Shri Hit
Prakash and told him that the note should be with-
drawn. Shri Hit Prakash had agreed with him and after
a word with Shri Burney, Dr. Rao was asked to revise
his original note. Shri Gopalakrishnan agreed that even
in the amended note there were certain facts like the
percentage of polling by the various parties which was
not. strictly warranted in an official document.

6.111 Shri Burney denied that he had ever, asked
Dr. Rao to prepare any paper and he was not aware if
anybody in the Ministry had asked him to do so. He
said that this paper was prepared voluntarily by Dr.
Rao. He said that Dr. Rao was a Consultant to the
Ministry and that he used to prepare a number of
such papers evaluating the performance of Govern-
ment Media Units and he thought that Dr. Rao had
prepared a paper for reorienting publicity in the wake
of the Chief Ministers' Conference where it was decided
that 20 plus 5 point Programme should be highlighted.
Shri Burney admitted that the paper was under circula-
tion for a day or two before it was substituted.

ktjShott^c;. ;:■; j: ■ JSKfc i r ^^:T-:^:>v/i'ii^:&^

ta&ii'&i '■'-'' i-f.v

CHAPTER VII

1. The case regarding the reversion of Shri Justice
Aggarwal of Delhi High Court :

'7.1 Shri R. N. Aggarwal, who belonged to the

Higher Judicial Service of the Union Territory of
Delhi,, was promoted in 1972 to the High Court of
Delhi and was appointed as ati Additional Judge of
the High Court. The term of Shri R. N. Aggarwal
was extended for another two years from 1974, also
as an Additional Judge. On August 13, 1975, there
occurred a vacancy on the retirement of Shri Justice
Jagjit Singh in the High Court. Normally, Shri R. N.
Aggarwal who was the senionnost Additional Judge,
would have been appointed to fill that post which
had fallen vacant. The Chief Justice of the High
Court recommended Shri R. N. Aggarwal for appoint-
ment as a permanent Judge. On September 22, 1975,
he recommended that Shri Aggarwal was an "asset to
the High Court". The Deputy Secretary prepared a
note on September 27, 1975, which was submitted to
■ the Secretary, Department of Justice and the approval
of the Chief Justice of India to the appointment of
Shri R. N. Aggarwal as a permanent Judge was ob-
tained on October 27, 1975. ' On January 3, 1976, the
Minister of Law, Justice and Company Affairs directed
that the appointment of Shri Aggarwal as a permanent
Judge be processed. That implied his approval to
the recommendation.

7.2 Shri Aggarwal was not appointed a permanent
Judge of the High Court and he had to revert as a
Sessions Judge.

7.3 What transpired between the period January 3,
1976 nrid January 12, 1976 is not evident from the
file. 'It appears that on November 3, 1975, Shri P. P.
Nayyar, a Joint Secretary in fits Department of Justice
had sent a note stating that Shri Justice R. N. Agganvar
was one of the Judges on the "MTSA Bench" of the
Delhi High Court. On this note Shri Khurana, Secre-
tary, Department. _of Justice, noted on November 4,
1975' that the matter should be discussed as to when
the Judgment in Shri Kuldip Nayar's case was announ-
ced.. On December 4, 1975, the Joint Secretary noted
that the judgment was delivered "on 15 : 7-75". He
also noted that the Law Minister wanted the case to
be processed early and the file to be put up to him.
The file was, accordingly, re-submitted. Later, it
appears that there was some discussion between Shri
Gokhale, the Law Minister, and the Secretary, Depart-
ment of Justice, when pursuant to that it was recorded
on January 3, 1976 t'hat the Law Minister desired
that the appointment of Shri R. N. Aggarwal as a
permanent Judge be processed.

7.4 Thereafter at the request of Shri. Khurana,
Secretary, Department of Justice, inquiries were made
by the Intelligence Bureau concerning Shri Aggarwal.

S/39 HA/77— 8

Shri S. N. Mathur, Director, Intelligence Bureau, re-
ported on January 12, 1976 that Shri R. N. Aggarwal
belonged to Judicial Service of Delhi and was closely
associated with R.S.S. in 1950s and early 1960s. It
was also mentioned in the report that he used to
attend Shakhas of R.S.S., in the Naya Bazar area of
Delhi and that he had stopped taking part in the
activities of the R.S.S. , in the early 1960s after the
Government issued orders prohibiting the Government
servants from participating in such activities. It would
also appear from the report of the Intelligence Bureau
that there were also other grounds raised against Shri
Aggarwal, but no further details were set out. There-
after on January 14, 1976, Shri Khurana recorded
that the report received from the Director of Intelli-
gence Bureau may be taken into /consideration in mak-
ing the recommendation to the 'Prime Minister. Shri
Gokhale prepared a note which is on the file but
undated, challenging the correctness of the association
of Shri Aggarwal with the R.S.S., for the related period
as Shri Aggarwal was not in fact in Delhi in the
1950s and early 1960s and further stated that nothing
was brought to his notice with regard to any specific
matter which may render him unfit to be appointed.

7.5 Shri Gokhale has stated before the Commission
that the allegations against Shri Aggarwal "were not
correct and I did it on the basis of facts which I had
meanwhile collected on my cwn, and had seen that
this report was not correct and what was alleged there
was not substantiated. Even the general allegations

about Mr. Justice Aggarwal. are not correct.

That is the note which I prepared and I had hand-
ed it over personally to the Prime Minister. According
to me it was demonstrably wrong and then she said, "I
will ask the Home Ministry", and perhaps she did.
I do not know whom she asked. "T saw her after

some days ngnin She said that she was told that

the .report was correct. The report . which I had
contested was correct and she had given me to under-
stand" that il was not intended to confirm Mr. Justice
Aggarwal. Now after this happened I made a note
", Apparently, thereafter the papers were sub-
mitted to the Prime Minister by Shri Gokhale, the
Law Minister, on February 20, 1976 not recommend-
ing confirmation/extension to Justice R. N. Aggarwal
and this was approved by Smt. Indira Gandhi on
February 24, 1976.

7.6 Shri Aggarwal in not being confirmed had to
revert as a Sessions Judge in the Delhi Administration.

7.7 In the course of his examination, the Director
of the Intelligence Bureau has disclosed that there were
some further inquiries made and some information was
collected. Whether that information was submitted to
the Prime Minister or the Government does not appear
from the record. But Shri Gokhale has stated that
he had prepared a note which was submitted to the

Prime Minister recommending the appointment of Shri
Aggarwal ; but that the Prime Minister declined to
accept the recommendation.

7.8 On a review of the files of the Government and
considered in the light of the evidence, it appears that.
Shri R. N. Aggarwal, who was regarded by the Chief
Justice as an asset to the High- Court and who had
functioned as a Judge for nearly four years, was asked
to revert to his original position as a Sessions Judge.

7.9 Smt. Gandhi has, in the reply which she gave
on the 21st of November, 1977, refused tfte request to
assist the Commission in the proceedings and' stated
that the Prime Minister was the "key-stone of the
Constitution" and was entitled to over-rule the recom-
mendation of a Cabinet colleague. She also stated
that it was in the light of this Constitutional position
that her decision not to confirm Shri Justice R. N.
Aggarwal may be considered by the Commission. She
further stated that she had no personal acquaintance
with Shri R. N. Aggarwal nor had she any private
information and that her decision was based upon an
assessment of the facts placed before her and the
conflicting' recommendations that she had received
from the Ministers of Law and Home Affairs. She
invited the Commission to examine official sources to
determine that no consideration whatsoever other than
those of public interest, adjudged in the circumstances,
were involved in her decision. But sfce declined to
file a statement on oath pursuant to a notice under
rule 5(2) (a), as required in terms of rule 5(3).

7.10 When a summons was issued to her under sec-
tion 8B of the Commissions of Inquiry Act, she appear-
ed before the Commission but declined to take oath
and give evidence on the plea that she was not legally
and Constitutionally bound to give such evidence. When
requested by the Commission to give evidence, she
categorically declined to do so.

7.11 The question, which this Commission has been
called upon to decide is whether the action of the
former Prime Minister Smt. Indira Gandhi amounted
to an abuse of authority or misuse of power. As
submitted by her in her letter dated 21st of November,
1977, s*he had no personal acquaintance with Shri
Aggarwal and she had no private information and that
no_ consideration other than those of public interest
adjudged in the circumstances, were involved in her
decision. There was the evidence of the report of the
Chief Justice that Shri Aggarwal was an asset to the
High Court of Delhi. He had functioned as a Judge
for four years in the High Court and nothing adverse
had come to the notice of anybody during that time.
The Minister of Law and Justice had apparently agreed
with f*he recommendation of the Judge of the High
Court and the Chief Justice of India that Shri Aggarwal
should be appointed to the office of a permanent Judge
of the High Court.

7.12 It is true that for adequate reasons it may be
open to the Prime Minister notwithstanding the recom-
mendations so made to overrule the recommendations
and decline to confirm tfie appointment as recommend-
ed. But this case discloses two disturbing facts : —

(a) (i) that sometime in the month of August,
1975, a petition for a writ of Habeas Corpus'

was filed by one Shri Kuldip Nayar,, a Jour-
nalist. The petition was heard by the Delhi
High Court by a Bench ■ consisting of S.
Rangarajan and R. N. Aggarwal, JJ and
the orders of the Government were set aside
and the attitude of the Government's decision
was criticised, especially the manner in which
the orders. were passed.

(ii) Soon thereafter Shri Justice S. Ran-
garajan was transferred from the 'Delhi High
Court and Shri Justice R. N. Aggarwal was
not confirmed in a clear vacancy, which had
occurred in the High Court and to which, in
the normal course, he would have been
appointed.

(iii) It appears that in Kuldip Nayar's
case after the hearing was concluded, the
Government finding its position in regard to
the merits of the orders passed against Shri
Kuldip Nayar unsustainable, intimated to"
the court that the orders against Shri
Kuldip Nayar were withdrawn and he had
been ordered to be released. It was, there-
fore, expected by the Government that since
"the Government have already revoked the
detention order of the detenue and as such
decision in the Habeas Corpus had become
infructuous". However, the court proceed-
ed to deliver its judgment and criticised the
conduct of the Government. There can be
no doubt that the procedure foliowed by the
Bench was correct. Because a party "to a
dispute, after arguing on the merits of the
case, when faced with the prospect of an
adverse decision, would not be permitted t6
amend the order or to withdraw the order
to forestall the decision by seeking to with-
draw the action taken by it or the orders
made by it.

b) (i) Though inquiries must have been made
with regard to the antecedents of Shri Justice
R. N. Aggarwal when he was to be appoint-
ed as Judge Of the High Court and when he
had continued as an Additional Judge for
about four years, nothing adverse is available
on record of the Government. Thereafter
for the mere reason which is not very clearly
disclosed on Hie file, when a recommendation
for the appointment of Shri Justice Aggarwal
as a permanent Judge was received from the
High Court of Delhi, Shri P. p. Nayvar,
. Joint Secretary in the Department of Justice,
invited the attention of the superior officers
that Shri Justice R. N. Aggarwal was one of
the two Judges in the "MISA Bench" of the
High Court of Delhi, apparently intending
to invite the attention that he had partici-
pated in delivering the judgment in Kuldip
Nayar's case. The information was obtained
and was placed on the file.

(ii) In the meantime, it appears that
a report was obtained from the Director of
Intelligence Bureau with regard to Shri
Aggarwal, The circumstances in which this

'-^''-V^^^i-S^-Tr^^

. ^ report appears to have been received, are
not clearly apparent from the record. The
. Law Minister, before whom the papers were
placed, challenged the correctness of the
association of Shri Aggarwal with the R.S.S.,
; which was reported, on the ground that the,
: report could not be true because Shri Aggar-
wal was not even in Delhi at the time when
he was alleged to have participated in the
activities of R.S.S. in Delhi.

(iii) The file is silent for the period

from January 14, to February 20, 1976. It

'. appears, however, from the circumstances

mentioned earlier that the papers had been

■ submitted to the Prime Minister and Shri
: Gokhale had discussed the case with her.
■' The circumstances do tend to create an im-

■ pression that because of the participation :of
: Shri Aggarwal in the hearing and disposal
: of a case filed by Shri Kuldip Nayar, the

■ Government was put in an awkward posi-
tion and that may have been responsible to
some extent in re-considering whether Shri

• Aggarwal should be continued as a Judge of

■ the High -Court. -Thereafter, a report was
. .obtained from the Intelligence Bureau and

the papers were submitted to the Prime
;■ Minister. The Prime Minister, Smt. Indira
. Gandhi, though has asserted through her

■ letter dated November 21, 1977 that she
;: had no private information and she acted

on the conflicting reports of the Home Minis-

■ try and the Law Ministry, has not chosen

■ to file a statement on oath, as required by
•■- , rule 5(3) and has declined to come into

■■ the witness box and 'to take an oath and
; . give evidence of her version, when requested
. by the Commission and has declined "also
. to give evidence in pursuance of the sum-
: motts issued to her under section SB of the

Act. It would, therefore, be open to the
, Commission to draw an adverse inference

against her.

(iv) On the one side there was the evi-
, dence of the persons who had the opportu-
nity to note the quality of his work and be

- acquainted with him in the discharge of his
duties, which was all favourable to him, Gn

'. the other, there were the orders of the Prime

■: Minister, which, she says, she passed declin-
ing to confirm Shri Aggarwal in the post of

. a Permanent Judge in exercise of her autho-

, ., rity to overrule the recommendation made

by the Law Minister. That in an appropriate

case the Prime Minister may have to exer-

i cise such an authority is not a matter which

; is relevant to this case,

(v) The question falling for considera-
tion is whether the action of the former Prime

■ Minister amounted to abuse of authority and
misuse of power. On that, part of the case

, there is no evidence whatever led by the

- Prime Minister in support of her version
that it was a bona fide act done by her as

a Prime Minister in the interest of the admi-
nistration; whereas the evidence disclosed
on the file and the oral evidence are clearly
indicative of the fact that there were no
circumstances which vjculd have come in the
way of Shri Aggarwal being appointed as a
Permanent Judge of the High Court.

7.13 It may be noticed that in the hierarchy of
courts the position of a Judge of a High Court is
superior to that of a Sessions Court; but the importance
of the office of a Sessions Judge cannot on that account
be minimised. The Sessions Judge, who also occupies
the office of the District Judge, exercises unlimited
jurisdiction in civil matters and is competent to impose
all sentences including a sentence even of death, sub-
ject, of course, to confirmation by the High Court.
If for any reason Shri Aggarwal was thought by Smt.
Gandhi to be unfit to hold the office of a Judge of
tiie High Court that would have been equally a ground
on which he would have been unlit to hold the high
office of a Sessions Judge in the Union Territory of
Delhi. But Shri Aggarwal was reverted to the office
of the Sessions Judge and he continued to hold that
office till he was again elevated to the High Court later
in the year 1977. That is a ground, which clearly
indicates that the order passed against Shri Aggarwal
was, prima facie, in the nature of an order of punish-
ment for participating in the hearing in Kuldip Nayar's
case and passing an order which tarnished the image
of the Government in the public eye.

7.14 The Commission is, therefore, of the view that
a case of misuse of authority and abuse of power is
disclosed in this case, against Smt. Gandhi.

2. Refusal by Smt, Indira Gandhi to extend the term
of Shri Justice V. R. Lalit of the Bombay High
Court.

7.15 Shri U. R. Lalit, an Additional Judge of the
High Court of Bombay, was recommended for exten-
sion of the tenure o£ his office by the Chief Justice
of the High Court of Bombay. The recommendation
was accepted by the Chief Minister of Maharashtra,
by the Governor of Maharashtra, by the Chief Justice
of India and by the Minister for Law, Justice and
Company Affairs of the Government of India. There
were no adverse reports against Shri U. R. Lalit. The
then Prime Minister, Smt. Indira Gandhi declined to
agree to Shri U. R. Lalit continuing as a Judge of the
High Court of Bombay. Accordingly, he ceased to
be a Judge on January 17, 1976. ,

7.16 Shri H. R. Gokhale, Minister of Law, affirmed
that there were no grounds for not extending the term
of Shri Lalit. Shri S. L. Khurana, the Secretary,
Department of Justice, was also examined. From the
file relating to Shri Lalit it appears that the Prime
Minister's Secretariat returned the file without any
endorsement. Shri Khurana then made a note that
it was not intended to give any further extension to
Shri Lalit; and, therefore, further steps should be taken
to examine the position immediately.

7J7 A slip, which" was a part of the file, has smce
been discovered from the Prime Minister's Secretariat

by the officers of the Commission. A note is made
by an official of the P.M.'s Secretariat stating : '

"Sometime ago a proposal of the Department of
Justice to continue Justice Lalit as an Addi-
tional Judge of the Bombay High Court was
submitted to P.M. Justice Lalif's present
term is expiring on 16-1-76 and the fresh
appointment has to be made before that.
Law Minister has been reminding me about
this case. He told me. that he had spoken
to P.M. also about this case a few days ago."

The note is signed by Shri B. N. Tandon, the then
Joint Secretary to the Prime Minister and is dated
12th of January, 1976.

7.18 It bears a. note made in the hand-writing of
the Prime Minister :

"I do not approve of giving him anolher term."

The word 'not' has been underlined. It is dated Janu-
ary 12, 1976, On that Shri Tandon made a note :

"Secretary may kindly see for information."
and thereafter the file was returned to the Minister
with an intimation that the

"P.M. has spoken to him.".

The file was, accordingly, returned.

7.19 The Commission had requested Smt. Gandhi
to appear before the Commission and assist the Com-
mission by giving information relating to the non-
appointment of Shri Lalit. Through her letter dated
November 21, 1977, Smt. Indira Gandhi stated that
the Prime Minister is competent to overrule the recom-
mendations of a Cabinet colleague and that in the
light of this Constitutional position, the decision was
taken not to confirm Shri Justice Lalit. She further
stated that she had no personal acquaintance with the
Judge concerned nor any private information and her
decision was made upon an assessment of facts placed
before her and the conflicting recommendations that
she had received from the Ministers of Law and Home
Affairs. She invited the Commission to examine the
official records and determine that no considerations
whatever, other than of public interest, adjudged in
the circumstances were involved in her decisions.

7.20 The reply filed by Smt. Gandhi was not as
required by rule 5(3) of the Commissions of Inquiry
Rules. She has, however, clearly stated in her reply,
which is not on oath, that she had no private, infor-
mation except what was contained in the file. But the
file contained no material which was adverse to Shri
Lalit.

7.21 Shri Gokhale, who gave his testimony on oath,
has also stated that there was nothing against Shri
Lalit and that it was only because Smt. Gandhi declin-
ed to confirm his appointment for another term, as
Additional Judge that he was constrained not to
continue Shri Lalit in office.

7.22 A notice was issued to Smt. Indira Gandhi
under rule 5(2) (a) of the Commissions of Inquiry
Rules and she was asked to file her statement. In
view of the disclosures made by Shri Gokhale, a sum-
mons was also issued to her under Section SB- of the
Commissions of Inquiry Act, She remained present
in the Commission Hall but declined to take oath and
give evidence when requested by the Commission to
go into the witness box to enable the Commission to
ascertain what her version was. In the circumstances,
the Commission would be justified in drawing adverse
inference having regard to all the materials placed
before the Commission that this was a clear case of
abuse of authority and that Smt. Gandhi arbitrarily
declined to extend the term of Shri U. R. Lalit- as an
Additional Judge of the Bombay High Court: It may
be pointed out that Shri U. R. Lalit was an Advocate
practising in the Bombay High Court before his ap-
pointment as an Additional Judge. Normally when, a.
person is appointed as an Additional Judge from the
Bar it is expected that he would be confirmed as a
Judge when a permanent vacancy arises. It appears
further that there had been hardly any case in which
such confirmation had not been made. There- were,
no materials at all on which it could even be faintly
suggested that Shri U. R, Lalit, who had functioned
as a Judge for two years, was unfit to continue in
office as a Judge of the High Court.

7.23 Shri Justice K. N. Wanchoo had made- a note
on the 29th of June, 1967 : —

"When*a Member of the Bar is appointed Addi-
tional Judge it must, be with a view to make
him permanent in due course. If that is not
possible, additional judgeship should not be
offered to a member of the Bar. I agree,-
therefore, that an undertaking should be
taken from members of the Bar that they
will accept a permanent judgeship when
offered to them in due course.. ..."

Refusal to extend the term of Shri U. R. Lalit. as a
Judge of the High Court, therefore, amounted to! sub-
version of well-established conventions and practices
and amounted to abuse of authority and misuse of
power by Smt. Indira Gandhi.

3. Deviation from established procedure and irregu-
larities in the appointment of Shri K. R. Puri as
Governor of the Reserve Bank of India.

7.24 In May, 1975, Shri N. C. Sen Gupta "was
appointed as Governor of the Reserve Bank of India
for a period of three months with effect from May 19,
1975. His term was, therefore, to end on August 18,
1975. This short term appointment was made to give
the Government time to identify a suitable person for
the post.

7.25 Shri C. Subramaniam, the then Finance Minis-
ter, sent a Top Secret note to Smt. Indira' Gandhi, then
Prime Minister, on 29-7-1975 discussing the profes-
sional, background and qualifications essential in an
individual who is to be considered for appointment to
this post. He said in this note that in assessing the
suitability of an individual one has to keep in mind

T — ~i _r iS.11- .. - . *■ ~ iiii;,iaaiiiStoto^to!iii^;ii,.-..iii^i^-.v

the functions which the Governor has to discharge
and the leadership that he has to provide to the Reserve
Bank, which is the Central Bank of the country. He
then discussed briefly the functions and responsibilities
of the Reserve Bank and its Head, the Governor.. Tak-
ing Into account the particularly difficult monetary
situation then, he said that he would expect the Reserve
Bank to be the main guide for the Government in the
formulation of their monetary and fiscal policies.

■ '7.26 In the light of these exacting requirements,
Shri Subramaniam went on to discuss the qualifications
of various distinguished Economists and/or Economic
Administrators like Dr. I G. Pate), Mr. Narayana
Prasad, Dr. S. R. Sen and Shfi M. G. Kaul, as possible
incumbents for appointment to the post of Governor,
lie also referred to Shri K. R. Pud, the then Chairman
of the Life Insurance Corporation of India. This is
what he said in regard to Shri Puri : —

"P.M. has in this connection mentioned the name
of Shri K. R. Puri, Chairman, L.I.C., I have
examined his suitability of the post very
carefully. He is an ordinary graduate and
as such lacks an adequate academic back-

; ground. He has been in the field of insurance
throughout his career and therefore his ex-
perience has been in a very limited area of
specialisation, unconnected with banking and
finance."

Shri Subramaniam concluded this Top Secret note by
saying that Smt. Gandhi, if she so wishes, may send
for -him fc> r discussion so that an early decision may
be taken. The original of this note could not be
traced in the Prime Minister's office.

7.27' Eventually on August 18,, 1975, Shri Subra-
maniam recorded the following order on the relevant
fileo'i the then Department of Banking :

"Shri K. R. Puri, now Chairman LIC, may be
appointed as Governor of Reserve Bank for
a period of one year. This has the' con-
currence of the Prime Minister. In view of
die fact Shri Sen Gupta's term expires
■■ tomorrow orders of appointment may issue
' immediately and A.C.C., kept informed.
' . Shri Puri may take charge tomorrow."

The A.C.C. referred to above is the Appointments
Committee of the Cabinet. It should be noted at this
stage that under the relevant Rules, framed for the
Transaction of the Business of the Government, the
appointment of the Governor of the Reserve Bank
required the approval of the Appointments Committee
of the Cabinet.

7.28 Pursuant to .Shri - ■■■Subramaniam's order,
extracted above, a notification was issued on the
18th August, 1975 appointing Shri K. R. Puri as
Governor of the Reserve Bank for a term of one year
with effect from the close of business on the August
19, 1975.

7.29 Thereafter, on August 20, 1975, Shri M". G.
Balasubranianian. the then Addl. Secretary in the

Department of Banking wrote to Shri U. C. Agarwal,
Establishment Officer in the Department of Personnel
and Administrative Reforms, who also functions as
Secretary to the Appointments Committee of the
Cabinet mentioning, inter alia, that it has been decided
with approval of Die Prime Minister to appoint Shri
K. R. Puri as the Governor of the Reserve Bank of
India for a period of one year with effect from the
close of business on August 19, 1975, that the relevant
Government notification has already been issued on
the August IS, 1975 and that Shri Aggarwal may
consider "recording the information suitably in the
office of the Appointments Committee of the Cabinet.' 1 *

7.30 The Appointments Committee of the Cabinet
consisted at the relevant time of the Prime Minister,
the Home Minister and the Minister concerned in the
Ministry or the Department whose proposal is being
considered by the Committee. There is no evidence
in the relevant papers to indicate that the Home
Minister was consulted at any stage before Shri K. R.
Puri's appointment as Governor of the Reserve
Bank.

7.31 It is seen from the evidence of Shri C. Sub-
ramaniam before the Commission that there was
disagreement in regard to the choice of a successor to
Shri S. Jagannathan as Governor of the Reserve Bank
and it is because of this disagreement that the interim
appointment of Shri Sen Gupta was made. Shri Sub-
ramaniam has stated further that even at that stage
Shri Puri's name had been mentioned to him and that
he could not agree with that suggestion. In response
to the query as to whether he Considered Shri Puri lit
to hold the post of such vast importance to the economy
of the country, Shri Subramaniam stated that "taking
into account the vast fields which the Reserve Bank
of India has to deal with, I thought Puri was not the
person who would fit in this job."

7.32 It would be relevant at this stage to refer to
a letter dated February 27, 1978 from Shri K. R. Puri
addressed to the Secretary to the Commission, "enclos-
ing thereto a note of the same date and copies of
certain Degree, Certificates, etc. In the note dated
February 2, 1978 Shri Puri has referred to .newspaper
reports of the evidence tendered before the Commis-
sion by Shri C. Subramaniam. Evidence was tendered
by him in this case on October 1, 1977 and presum-
ably reports in this regard must have appeared in
newspapers on the next day, namely, October 2, 1977.
Shri Puri has said, inter alia, in this note as under : —

"Deposing before the Commission, Mr. C.
Subramaniam has given the main reason for
not considering nre lit for appointment as
Governor of the Reserve Bank of India that
I was an ordinary graduate and as such lack-
ed adequate background."

7.33 Shri Subramaniam's statement that Shri Puri
is an ordinary graduate and as such lacks an adequate
academic background was not made in the testimony
before the Commission but made a note submitted
by him to the then- Prime Minister on July 27, 1975,
presumably after verifying the records in this regard
which should have been available to the Finance

Minister. It is seen from the papers since submitted
by Shri Puri that he had obtained the Degree of
Bachelor of Arts with Honours in English in the exa-
mination held by the University of Punjab in the year
1939 and that he was placed in the Second Division.
It is further seen that he had also obtained the Degree
of the Bachelor of Laws of the same University in the
anamination held in May, 1943 arid that he was placed
in the Second Division. Another certificate indicates
that he was successful in the House Examination of
the F.E.L. Class held in December 1941 and that he
stood First in the order of merit in the subject of
Mercantile Law, U is not clear how Shri Subrama-
niam's statement that Shri K. R. Puri is an ordinary
graduate can be considered as erroneous, especially
as the then Finance Minister was mentioning it in the
context ot the specialised knowledge and experience
required Eor the post of the Governor of the Reserve
Bank, which he had briefly indicated in the earlier part
of the same note.

7.34 As regards Shri C. Subramaniam's testimuny
before the Commission, insofar as it related to Shri
Puri's academic background and his competence in
his capacity as Chairman of L.I.C., 1 cannot do better
than quote verbatim from the relevant portion of the
proceedings ;- —

-"Witness : As a matter of fact, Mr. Puri was
\. ■ initially in my Ministry and he was holding
the post of Chairman and Managing Directoi
of the L.I.C. As an officer in the L.I.C.,
no doubt, he was quite competent! But
taking into account the vast fields which
the Reserve Bank of India has to deal with,
I thought Puri was not the person who would
fit in to this job.

Chairman : Did he have any academic qualifica-
tions which might have otherwise made him
suitable ?

Witness : 1 had made it quite clear in my memo
to the Prime Minister that apart from his
academic qualifications, which was secondary,
in regard to his experience, particularly, in
the national sphere

Chairman : You mentioned that he was an
ordinary graduate.

Witness : That is true. Even an ordinary graduate
may acquire experience later on. Both the
» thingshavc to be taken into consideration,

his initial academic qualifications, and later
on, whether he had acquired any expertise
in these fields. After all, this is the starting
point.

Chairman : I am coming to that.

Witness : Taking both the things into considera-
tion, I was definitely of the opinion that
Mr. Puri may not be fit for the job."

7.35 To the Commission's query as to why he still
fell in line with the suggestion that Shri Puri should be
appointed, Shri Subramaniam replied that this matter

had gone on dragging for three months and that he
had quite a number of discussions with the . Prime
Minister and also with the Secretary to the Prime
Minister. In response to the query as to whether it
means that the Prime Minister was insistent that Mr.
Puri alone should be appointed, Shri Subramaniam
replied —

"She said that Mr. K. R. Puri would be competent
for the job and that he should be appointed."

Shri Subramaniam also stated that the then \ Prime
Minister had told him that as Chairman of the Life
Insurance Corporation of India, Shri Puri had to deal
with "investments and various other things," ''But in
my view that was not quite relevant because the Reserve
Bank of India deals with completely different problems
of financial policy." in conclusion, Shri Subramaniam
stated as under :

"Mr 1 , Puri's appointment was restricted to one
year. Generally it is not done. It is live
year period. I think it was because, of my
objection so that his performance ruay_ be
watched. So the period was restricted* to
one year."

7.36 Shri Puri's observation in his note dated
February 27, 1 978, referred to above, that on _ the
expiry of his initial one year term, he was re-appointed
in January 1976 for a further period of two years does
not affect in any manner Shri Subramaniam's statement
regarding his initial objections to the proposal. •

7.37 Smt. Gandhi 'has not filed any statement in this
case as was required to be done under Rule 5(2) (a)
of the Commission of Inquiry (Central) Rules ; 1972,
she had responded to the summons u/s 8B of the Act.
But she refused to take the oath and tender evidence.
From the facts on record, and the evidence of Shn
C. Subramaniam in this case, it appears that *e normal
and established procedure in regard to the appointment
of the Governor of the Reserve Bank of India was
not followed and that the then Finance Minister Shri
C. Subramaniam was virtually compelled to fall in
line with the suggestion made by the then ' Prime
Minister Smt. Gandhi.' This was yet another case of
subversion of established administrative procedure and
convention by Smt. Indira Gandhi as the P.M.

4, Subversion of lawful processes and well-established
conventions and deviation from administrative pro~
cedures and practices in the appointment of Skri
T. R. Varadachary as Cfiairman of the State Bank
of India.

7:38 On June 24, 1976, the then Minister of
Revenue and Banking Shri Pranab Mukherjee sent the
following secret note to the then Prime Minister :.

"Subject : Shri R. K. Talwar, Chairman, State
Bank of India—Term of appoint-
ment.

"Shri R. K. Talwar was appointed Chairman,
State Bank of India with effect from March
1, 1969 for a term of 5 years. The' term
was extended by a further period of 3 years
and comes to an end on February 28, 1977.

mmmmmmmzmmmmm

Jt has been the Government's intention that
his term of appointment should be curtailed
and he be asked to vacate office. As the
State Bank of India Act provided only for
removal from" office which could be only as
a punishment, the State Bank of India Act
., has been recently amended to provide for

the Government, if it so chooses, to termi-
nate' the term by giving 3 months' notice or
3 months' salary and allowances in lieu
thereof. Accordingly, it is proposed to termi-
nate, in terms of Sub-section (I A) of section
20 of the Act, the term of appointment of
Shri Talwar as at the close of business on
30th June, 1976 and pay him 3 months'
salary and allowances in lieu of notice.

"In the vacancy caused, it is proposed that Shri
' ■ T. R. Varadachary at present Managing

Director, State Bank of India, be appointed
as Chairman with effect from 1st July, 1976
till February 28, 1977, i.e. till such time as
he would have served as Managing Director
of State Bank of Itfdia.

. Sd/- Pranab Mukherjee,

. ; Minister of Revenue and Banking

Prime Minister of India

U.O. No. 350(S)/MRB/76 dated 24-6-1.976"

. 7.39 The Secretary to the Prime Minister endorsed
on the note on July 21, 1976, that "PM has approved",
and returned it to Shri Pranab Mukherjee. Thereupon,
Shri Pranab Mukherjee recorded a note order on
July 24, 1976 to the effect that the. order (appointing
Shri T. R. Varadachary as Chairman of the State Bank
of India) may be effective from August 4. 1976.
Pursuant to this order, the Department of Banking
issued a notification dated July 30, 1976 appointing
Shri Varadachary as the Chairman of the State Bank
for the period commencing from August 4, 1976 and
ending with February 28, 1977. A copy of this noti-
fication "was also endorsed to the Establishment Officer
in the Deoartment of Personnel and Administrative
Reforms, Government of India.

7.40 Under the relevant Rules framed for the
Transaction of the Business of the Government of
India, the appointment of Chairman of the State Bank
of India requires the approval of the Appointments
Committee of the Cabinet. Sub-clause (a) of sub-
section (1) of section 19 of the State Bank of Tndia
Ad, 1955, reads as under : —

"19(1) The Central Board shall consist of the
following, namely :«—

(a) a Chairman and a Vice-Chairman to be
appointed by the Central Government in
consultation with the Reserve Bank."

Clause (b) of section 2 of the Act defines the Central
Board to mean the Central Board of Directors of the
State Bank and Clause (bb) defines the Chairman as
meaning the Chairman of the Central Board. It would
be seen from the above that the Chairman of the State
Bank of India is to be aooointed by the Central Govern-
ment in consultation with the Reserve Bank of- India.

7.41 In November, 1975, the then Chairman of the
State Bank of India, Shri R. K. Talwar, had forwarded
a note to Shri Varadachary asking for his comments
on certain matters indicative of improprieties on the
part of Shri Varadachary. The then Chairman had
also sought to bring to the notice of the Central Board
of the State Bank for discussion at its meeting which
was to be held on March 30, 1976, a memorandum
dealing with the alleged improprieties on Shri Varada-
chary's part. It is, however, seen that as desired by
Shr't N. C. Sen Gupta, the then Secretary, Department
of Banking and Shri P. K. Mukherjee, the then Minister
for Revenue and Banking, Shri M. C Balasubra-
maniam, the then Additional Secretary in the Depart-
ment of Banking, who was also a Member of the
Central Board of the State Bank met Shri Talwar
and advised him not to bring the subject for discussion
before the Board. Accordingly, the matter was not
brought before the Board at its meeting on March 30,
1976. There is, however, nothing on record to show
that the Government examined the matter further and
satisfied itself, before appointing Shri Varadachary as
the Chairman of the State Bank, that he was not guilty
of any impropriety as alleged by the then Chairman.

7.42 As already mentioned above, a copy of the
notification issued by the Department of Banking on
July 30, 1976 appointing Shri Varadachary as Chair-
man of the State Bank of India with effect from August
4, 1976, was endorsed to the Establishment Officer in
the Department of Personnel and Administrative
Reforms. This appears to be the only communication
to the Secretariat of the Appointments Committee of
the Cabinet in regard to this appointment, which
required the approval of the Committee,

7.43 In the course of his evidence before the Com-
mission Shri N. C. Sen Gupta, former Secretary,
Department of Banking had indicated that the intro-
duction of Sub-section <IA) in section 20 of the State
Bank of India Act, 1955, by means of an amendment
thereto in 1976 was to enable the Governmentt to place
the State Bank on the same footing as other nationalised
Banks and that the amendment was not intended to
enable the Government to relieve Shri R'. K....Talwar
of his office as Chairman of the State Bank of India.
However, the first paragraph of Shri Pranab Mukher-
jee's note dated June 24, ] 976, referred to above, does
not appear to bear out Shri Sen Gupta's testimony.
It is also seen from a note recorded bv Shri J. C. Roy,
an officer in the Department of Banking on Aueust 4,
1976, that according to the order of the then Minister
for Revenue and Banking, Shri R. K. Talwar was to
be served with a notice for termination of his term of
office under section 20(IA) of the State Bank of. India
Act and further that the notice and orocedure for
serving it had been finalised in consultation with, the.
Ministry of Law.

7.44 Regarding consultation with the Reserve Bank
Shri Sen GuDta stated before the Commission that he
had consulted the Governor of the Reserve Bank orally
and in this connection he referred to a letter written bv
him to the Governor on Julv 30, 1976. The only
letter that Shri Sen Guota had written to the Governor
of the Reserve Bank in this regard on July 30, 1976

was to the effect that on a request made by Shri R. K.
Talwar he had been sanctioned leave with effect from
August 4, 1976 to February 28, 1977. There is no
mention in that letter of the name of the successor to
be appointed to Shri R, K. Talwar, much less an
indication of any consultation in this regard. The
only reference in that letter to a successor to Shri R. K.
Talwar is as under :

"We are separately issuing Government notifica-
tion regarding appointment of his successor."

When faced with this, Shri Sen Gupta, in the course
of his evidence before the Commission, said "this was
really an ex-post-facto consultation." Needless to
add, the consultation statutorily required could certainly
not be ex-post-facto, apart from the fact that there is
no evidence even of the so-called ex-post-facto
consultation.

7.45 Shri Pranab Mukherjee who had been requested
to assist the Commission at the preliminary stage of
its inquiry had done so, but he indicated that before
answering any questions put to him he would like to
make a submission in regard to the propriety of doing
so. He thereafter said that the oath of office taken by
him at the time of entering upon office precludes him
from answering those questions which involve matters
which came under his consideration or within his
knowledge as a Minister. However, the Commission
gave the ruling that by giving any information before
it, Shri Mukherjee would not be violating either the
provisions of the Official Secrets Act or the oath of
office taken by him. Thereafter, Shri Mukherjee pro-
ceeded to answer the queries put to him by the Com-
mission. When specifically asked whether the Reserve
Bank was consulted as required by section 19 of the
State Bank of India Act, Shri Mukherjee stated as
under : —

"Sir, when the trouble of this nature started, I kept
the Reserve Bank Governor informed and
I had some discussions. But I do not know
whether any such discussion is reported
anywhere in the files. But I had some dis-
cussions with him because he was also involv-
ed in the whole process. But I cannot tell
exactly whether before processing the
appointment his foimal consultation was
obtained or not."

In this case again it was Shri Mukherjee's claim that
the consultation was oral, that he spoke not on one
occasion' but on more than one occasion and further
that he did not recollect whether any record of such
Consultation was maintained. Nor could he indicate
the date of such consultation. In response to the Com-
mission's inquiry as to whether he thought that he
should either have recorded a note regarding the con-
sultation with the Reserve Bank or at least have asked
someone else in his office like the Secretary to make
a note that the Governor of the Reserve Bank had
been consulted and that he is of the opinion that Shri
Varadachary should be appointed as Chairman of the
State Bank, Shri Mukherjee said : —

"Sir, in fact, when I went through the rile to
refresh my memory there was no such
noting."

The Commission has been shown a number of
instances where in view of urgency of the matter or
for some other reason consultation with the Reserve
Bank either when statutorily required or otherwise
has been oral but in all such instances the 'fact of
consultation is seen to have been recorded contem-
poraneously and invariably backed up by
correspondence indicating such oral consultation, '

In the light of the consistent practice and in the
light of the nature of the oral testimony of Shri Sen
Gupta and Shri Mukherjee, the Commission is of the
view that there was no consultation with the Reserve
Bank in this case, as was required in terms -of
sub-clause (a) of sub-section (I) of section 19 of the
State Bank of India, 1955.

7,46- On April 30, 1977, Shri T. R. Varadachary
wrote a letter to the Prime Minister expressing his
shock and surprise at being asked to hand over charge
as Chairman of the State Bank of India with effect
from that day. He enclosed thereto a note dated
April 21, 1977, which he had sent to the then
Secretary, Department of Revenue and Banking. The
note, according to him, clarified his position in regard
to various unfounded allegations made against him
in sections of the press and otherwise by word of
mouth. Certain extracts c£ the note had been
furnished in the summary presented before the
Commission. It would appear therefrom that as per
Ws own statement, Shri Varadachary had met
Shri Sanjay Gandhi at the instance of Shri Pranab
Mukherjee "to lodge" his "claim" for appointment as
Chairman of the State Bank of India and that he had
several other meetings with Shri Sanjay Gandhi most
of thern on the suggestion or direction of Shri Pranab
Mukherjee, during which he had consulted or taken
instructions from Shri Sanjay Gandhi on various
matters regarding the functioning of the State Bank
including staff matters.

7.47 In response to detailed inquiries by the
Commission in this regard Shri Pranab Mukherjee
denied that he had ever asked Shri Varadachary to
see Shri Sanjay Gandhi in relation to his appointment
or other matters relating to the State Bank although
he did confirm the meeting which Shri Varadachary
had with the Chairman of the Delhi Small Industries
Development Corporation at Shri Mukherjee's
residence. He also broadly confirmed Shri Varada 1
charay's statements in relation to most of the matters
except in as far as they related to references to
Shri Sanjay Gandhi. He was specifically asked
by the Commission as to whether he could furnish any
reason why Shri Varadachary should, in a letter
addressed to the present Prime Minister, make these
statements on the eve of his handing ove:r charge to
another officer, and whether Shri Mukherjee could
suggest any reason why Shri Varadachary should
state therein something which is not true. All that
Shri Mukheriee had to say was "Sir, I cannot say
anything on it."

7.48 The Commission, however, sees no reason to
disbelieve the facts as set out in Shri Varadachary's
note dated April 21, 1977, enclosed to his letter dated
April 30, 1977, to the Prime Minister although it was

not possible to examine Shri Varadachary as the

• Commission was informed that he was abroad and,
therefore, not .readily available.

7.49 Although Shri Pranab Mukherjec assisted the
Commission at. the preliminary stage of its fact finding
inquiry, he did not file any statement in this case as
was required to be done under Rule 5(2) (a) of the
Commissions of Inquiry (Centra!) Rules, 3972. He
had responded to the summons under section 8B of
the Commissions of Inquiry Act,, 1952. But he
refused to take oath and tender evidence. However,
from the facts on record and the evidence analysed
above, it appears that the normal established procedure
in regard to the appointment of the Chairman of i*he
State Bank of India was not. followed in this case and
further that it was not in accordance with the
provisions of the State Bank of India Act, 1955, which
made- consultation with the Reserve Bank of India a
condition precedent to the appointment of the
Chairman by the Central Government, The
Commission is of the view that considerations other
than strictly professional and totally extraneous have
unfortunately been allowed to operate in arriving at
the decision to appoint Shri Varadachary. Shri Pranab
Mukherjee has violated established administrative
conventions and procedures and misused his position
in the appointment of Shri Varadachary.

5. Deviation from established procedure and irregulari-
ties in the appointment of Shri T. R. Tuli as
Chairman, and Managing Director of Punjab'
■ National Bank.

7.50 Shri P, L. Tandon's term as Chairman and
Managing Director of the Punjab National Bank was
due' to expire on 31-7-75. Under sub-clause (a) of
Ciause 3, read with sub-clause (1) of Clause 8, of the
Nationalised Banks (Management and Miscellaneous
Provisions) Scheme, 1970, appointment. of his successor
was to be made by the Central Government after
consultation with the Reserve Bank of India, Accord-
ingly on May. 12, 1975 the then Secretary, Department
ol' Banking wrote to the Governor Reserve Bank,
inter- alia, seeking the Res:rve Bank's views .in this
regard. In his reply dated May 14, 1975, the Governor
of the' Reserve Bank wrote that the- Reserve Bank
til ii'i ks that Shri Tandon's recommeiidiUion in favour of
Shri O. P. Gupta is very appropriate. He added that
in fact the Rank would recommend that Shri O. P.
Gupta be considered very seriously for the succession
straightaway. The then Finance Minister agreed with
Reserve Bank's recommendation that Shri O. P. Gupla
who was then the Deputy General Manager of the
Punjab National Bank should b'i appointed as Us Chair-
man and Managing Director, Accordingly, with the
approval of the Finance Minister, the Department of
Banking submitted a note to the Appointment Com-
mittee of the Cabmet on the May 13, 1975 seeking the
Appointments Committee's approval to Mr, O. P.
Gupta's appo : ntment. The proposal as approved by
the Finance Minister was submitted by. Shri U. C
Aggarwal Establishment Officer, on June 4, 1975, for
approval to the other two Members of the ApDoin*-
ments Committee, namely the Home M-inister and the

S/39;HA/77— 9 .. v- ' \,-v; -

Prims Minister, through the Cabinet Secretary. The
Cabinet Secretary forwarded it to the -Home Minister
on June 5, 1975. Shri K. Brahmananda Reddy, the then
Home Minister, approved it on June 7, 1975 aad
passed on the papers to the Prime Minister. This pro-
posal lay pending with the Prime Minister for a long
lims and no decision was conveyed to the then Depart-
ment of Banking until after the Prime Minister approv-
ed the appointment of Shri T. R. Tuli to the same post
in the following circumstances.

7.51 On July 15, 1975, Shri M. G. Balasubra-,
manias, the then Add!. Secretary in the Department of
Skulking, recorded the following minute on the relevant
file of the Department of Banking :

"The file has been returned from F.M's. office for
submission of revised proposals. I have
spoken to Governor, RBI.

He recorded the following further minute on July 21,

1975 : "

"I enquired of the Governor, when I met hifn in
Calcutta on 19th July, 1975, about RBl's
report to us regarding Government's proposal
to appoint Mr. T. R. Tuli or New Bank of
India as Chairman. Punjab National Bank
about which I had spoken to him over the
phone on 15th July, 1975. Governor told me
that he was under the impression that I
wouhi.be writing to him about this to enable
RBI to send a reply. When I told him tha f
my understanding was different, he promised
to write to me after he reaches Bombay on
21st evening.

"The Chairman and Managing Director is to be
appointed by Government after consultation
with the RBI and RBI has been consulted,
please put up the file for F.M.'s orders today
itxetf, whether he should send a revised note
to ACC or issue the ordeis and inform the
E.O. to keep the ACC apprised."

7.52 Accordingly, a note was recorded on the same
day, namely July 21, 1975, by Shri D. M. Sukthankar,
Director in the Department of Bunking, seeking the
Finance Minister's order, inter aim, as to whether a
notification appointing Shri T, R, Tuli as Chairman
and Managing Director of the Punjab National Bank
may be issued straightaway and the Establishment
Officer requested to keep the Appointments Committee
of the Cabinet apprised or whether a revised note fnav
be sent to the Appointments Committee of the Cabinet

■ for obtaining their approval to the revised proposal.
Shri Sukthankar's note starts by saying that the Gov-
ernor, Reserve Bank of India, has been consulted bv
the Additional Secretary regarding the Government's
decision to appoint Shri T. R. Tuli. Chairman, N*w
Bank of India Ltd. (a Bank in the Private Sector) as
Chairman and Managing Director of fhe Punjab
National Bank with effect from Aueust 1. 1975. Sieni-
ficantlv it does not state what the views of the Reserve
Bank in this regard ,were. The reason for this omission
will be clear presently.

7.53 Shri Subramaniam minuted on July. 22, 1975
that Shri Tuli may be appointed straightaway for a
period of one year and sought the then Prime Minister's
approval to this. The then Prime Minister approved the
proposal on July 24, 1975 and accordingly Shri Tuli
was appointed as Chairman and Managing Director of
the Punjab National Bank in terms of notification dated
July 31, 1975 issued in this regard. Thereafter, on
August 5, 1975, Shri M. G. Balasubramaniam wrote a
letter to Shri U. C. Agarwal, the Establishment Officer
referring to the earlier note of the then Department
of Banking regarding the appointment of a new incum-
bent to the post of Chairman and Managing Director
of the Punjab National Bank and informed him that it
has since been decided with the approval of the Prime
Minister to appoint Shri T. R. Tuli to that post for a
period of one year with effect from August 1, 1975.
The letter also indicated that the Home Minister has
also been kept suitably informed by the Finance Minis-
ter's Office and went on to suggest that the Establish-
ment Officer may perhaps consider recording the infor-
mation suitably in the office of the Appointments
Committee of the Cabinet.

7.54 The Reserve Bank's views on the Government's
proposal to appoint Shri T. R. Tuli of the New Bank
of India about which Shri M. G. Balasubramaniam had
spoken over the telephone to the then Governor of
Reserve Bank on July 15, 1975 were contained in the
Governor's letter dated July 22, 1975 (i.e. one day
after Shri Sukthankar's note referred to at paragraph
3 above was submitted to the Finance Minister) and
was received in the Department of Banking on the
July 23, 1975. This letter gives the unmistakable im-
pression that the Reserve Bank was not very enthusias-
tic about the Government's proposal in this regard. In
his testimony before the Commission, Shri C. Subra-
maniam stated that he would "take the Reserve Bank's
report as neutral."

7.55 In response to a query as to why the proposal
for the appointment of Shri O. P. Gupta which the
Finance Minister had made on the recommendation of
the Reserve Bank was not carried out, Shri Subra-
maniam stated that while this was being processed, the
Prime Minister mentioned that Shri Tuli's name should
also be considered for the post. He also indicated in the
course of his testimony that he did not know Shri Tuli
before, and comparatively speaking, Punjab National
Bank was very much bigger than the New Bank of
Tndia. When asked whether the Prime Minister
suggested that Shri Tuli should be appointed, Shri
Subramaniam, replied "yes".

7.56 As already indicated in paragraph 4 above,
Smt. Gandhi approved the proposal to appoint Shri
T. R. Tuli straightaway as Chairman and Managing
Director of the Punjab National Bank on July 24, 1975.
Thereafter, on the very next day, namely, July 25, 1975,
the Original proposal submitted to the Prime Minister
early in June 1975 to appoint Shri O. P. Gupta to this
post was returned by Shri Ramachandran, Joint Secre-
tary to the Prime Minister with the following remark :

"It was learnt that Finance Minister was not
proceeding with this proposal. He had sepa-
rately submitted alternative proposals to PM.

PM has approved Finance Minister's proposal
to appoint Shri T. R. Tuli, at present Chair-
man of New Bank of India Ltd., as Chairman
and MD of PNB for a period of one year
w.e.f. August 1, 1975. Finance Ministry will
be sending a formal note to E.O.; giving
details."- i

This remark, to say the least, is intriguing in the light
of Shri C. Subramaniam's evidence that Shri Tuli's
name was suggested by none other than the then
Prime Minister herself.

7.57 Smt. Gandhi has not filed any.statement in this
case, as was required to be done under Rule5(2)(a)
of the Commission of Inquiry (Central) Rules, 1972.
She had responded to the summons under section 8B
of the Commissions of Inquiry Act, 1952, but had
refused to take oath and declined to give evidence.
However, it .is clear from the foregoing facts, that in
this case, the Finance Minister had agreed with the
recommendation of the Reserve Bank that Shri O. P.
Gupta may bs appointed as Chairman and Managing
Director of the Punjab National Bank. The proposal in
this regard, approved by the Finance Minister and the
Horns Minister, had been submitted to Smt. Gandhi in
her capacity as one of the members of the Appoint-
ments Committee of the Cabinet. When this proposal
was pending with her for her concurrence, she sugges-
ted the name of Shri T. R. Tuli for the post and within
a very short time thereafter Shri Tuli's appointment to
this post was approved. It is also seen that before
arriving at this decision to appoint the Chairman of
a comparatively small bank in the Private Sector to the
senior-most position in one of the biggest Public Sector
banks in the country, ho effort was made to consider
the suitability for this post, of senior Managers within
the public sector banking-system itself as had been
done in several other instances. \

7.58 No reason whatsoever has been given for
departing from the recommendation of the Reserve
Bank which has intimate knowledge of the working
of all the Banks in the country and is, therefore, in a
position to judge the comparative merits of the;varicus
officers for top positions in the Banking Sector. This
becomes even more striking since Reserve Bank's re-
commendation had been found acceptable by the
Finance Minister himself and by the Home Minister.
If the then Prime Minister had any serious difference
of opinion in this regard, there .is no reason why the
matter could not have been discussed by her with the
two. other members of the Appointments Committee
or in the alternative whv she could not record her views
in this regard on the file submitted to her, instead of
virtually directing Shri Subramaniam to submit a revis-
ed proposal in favour of a person of her choice.

7.59 Under the circumstances, the Commission is of
the view that this is yet another instance where the
then Finance Minister Shri C. Subramaniam was vir-
tually compelled to fall in line with the suggestion
made by the then Prime Minister, Smt. Gandhi and
that such compulsion amounted to abuse of authority
by the former Prime Minister. It clearly resulted in
subversion of well-established conventions.

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6. Deviation from the established procedure for the
selection of officers for top level executive post in
Public Sector Undertakings, in the case of Li. Gen.
I: _ T. Satarawala, as Chairman-cma-Managing
Director, India Tourism and Development Corpora-
tion

7.60 At the request of the Minister for Tourism
and Civil Aviation, the Public Enterprises Selection
Board (PESB) recommended suitable names for the
post of Chairman-c«m-Managing Director of India
f ou.rism Development Corporation. According to Reso-
lution No. 5(l)/74 of Bureau of Public Enterprises
dated August 30, 1974, it was the responsibility of the
Board to select persons for posts, such as, full-time
Chairman, part-time Chairman and Managing Director
for all Public Sector Corporations.

7.61 The P.E.S.B. met on July 26, 1976 and sug-
gested the names of Sh. Ajit Singh and Shri B. S. Das,
after considering eight names amongst whom was the

- name of Lt. Gen. J. T. Satarawala, The recommenda-
tion of the P.E.SJB. was communicated to the Ministry
on August 9, 1976 and a draft letter requesting "the
Establishment Officer to obtain the approval of the
Appointments Committee was prepared by the Ministry.
The Secretary Shri N. K. Mukarjee agreed to the pro-
posal and marked the file to the Minister for approval.
The Minister then desired that the Minister for State
may also see the proposal. The Minister for Slate Shri
Surindra Pal Singh suggested the name of Lt. Gen. J. T.
Satarwala, He stated that in his opinion to bring about
a change at die topmost level in I.T.D.C., would be
detrimental to the national interest. The Minister for
State commented that Lt. Gen. Satarawala was keeping
good physical condition and was quite capable of
shouldering the onerous and heavy responsibility of
looking alter the I.T.D.C.

7.62 Shri Raj Bahadur agreed with the Minister of
State, and, accordingly, a revised draft was prepared.

It was dealt with by the Joint Secretary in the absence
of the Secretary. The Appointments Committee of the
Cabinet approved the appointment of Lt. Gen. Satara-
wala, who had been considered by the P.E.S.B, but not
recommended for appointment.

7.63 It is not a healthy convention to post an officer
as a lop level executive, who was earlier interviewed
and not considered suitable by the Public Enterprises
Selection Board to the exclusion uC the names in the
paiiel recommended by the P.E.S.B, The better course
would have been to request the P.E.S.B., to suggest a
fresh panel of names. By ignoring the recommenda-
tions of a statutory body, the Government was making
an inroad into the relevance and respectability of such
a body.

addition to his own duties as wholetime Member,
International Airports Authority of India. The Ministry
forwarded to the Public Enterprises Selection Board
the names of Shri B. S. Das and two others,

7.65 The matter was considered by the Public
Enterprises Selection Board at its meeting held on
December 4, 1975. After considering the suitability
o'i the candidates possessing the requisite qualifications,
the P.E.S.B. listed five persons, amongst whom the
first was Shri B. S. Das,

7.66 The Board recommended Shri B. S. Das as the
most suitable person for appointment as Chairman,
I.A.A.I. The recommendation of the P.E.S.B. was
accepted by. the then Minister for Tourism and Civil
Aviation and the Establishment Officer was approached
on 24th December, 1975 to seek approval of the
Appointments Committee of the Cabinet for appoint-
ment of Shri B, S, Das as Chairman, I.A.A.I.

7.67 While seeking the approval of the A.C.C. for

appointment of Shri Das, the Ministry sent only his
C.R.. dossiers and particulars of none of the other
candidates considered by the P.E.S.B. were forwarded.

7.68 The Appointments Committee of the Cabinet,
however, chose to disagree with the recommendation
of the P.E.S.B. and did not approve the proposal to
the appointment of Shri B. S. Das as Chairman.
Instead, the Committee, desired that Air Marshal
H. C. Dewan be appointed to the post. No apparent
reason for deviating from the procedure of selection
of top level executive officer was given. Air Marshal .
H. C. Dewan had been interviewed by the P.E.S.B.
but was not found suitable. The then Minister of
Tourism and Civil Aviation choose to ignore the
Secretary's noting that there was disparity of criteria
as between P.E.S.B., and A.C.C, particularly because
.Air Marshal Dewan had been considered but was not
recommended by the P.E.S.B. The then Minister,
however, directed that the decision of the A.C.C.
should be complied with.

7.69 If the person recommended by the P.E.S.B.,
in the present case was hot acceptable for any
particular reason, the appointing authorities could well
have asked for a fresh panel of suitable candidates.
By not doing this and appointing a person who had
been interviewed by the P.E.S.B., and not found
suitable, the Government has exposed itself to the
charge of, to say the least, injecting into the selection
process considerations which may well be extraneous
to the requirements of the job. Such a practice does
not add to' the credibility of established institutions;
rather it impaires it.

7. Deviation from the established procedure for the

selection of officers for top level executive post in

Public Sector Undertakings — in the case of Air

'■.Marshal H. C. Dewan, as Chairman, International

Airport Authority of India

. 7.64 On the completion of the tenure of Air Marshal
Y. V. Malse, Shri B. S. Das was appointed to look
after the current duties of the post of Chairman in

8, Misuse of powers and institution of false criminal
complaints against four senior officials by the C.B.I.
at the instance of Smt. Indira Gandhi

7.70 A question asked by Shri Jyotirmoy Basu in
the Parliament seeking to elicit information from the
Government concerning import of machinery by Maruti
Private Limited, was listed for reply on April 16, 1975.
Four officers of" the Ministries, Shri Krishnaswamy,

Deputy Secretary, Heavy Industries;' Shri A. S. Rajan,
Development Officer, DGTD; and Shri L. R. Cavale,
Chief Marketing Manager, P.E.C; and Shri P. S-
-Bhatnagar, Deputy Marketing Manager, P.E.C, were
collecting such relevant information as would enable
the Minister concerned to reply to the question.,

7.71 In the process of gathering information, Shri
Krishnaswamy asked Shri Khosla, an officer of DGTD
to contact the Manager of Maruti Private Limited and
obtain certain information. Shri Khosla accompanied
by Shri Bharij. visited the factory of Maruti Limited on
April 10, 1975, but no information was supplied to
them by the Management of Maruti Limited.

7.72 Some time between April 9 and 14, 1975,
Shri A. S. Rajan and Shri P. S. Bhatnagar contacted
M/s. Batliboi and Company on telephone to elicit cer-
tain information in relation to the question, which was
to be answered in the Parliament. On April 14, 1975,
Shri R. K. Dhawan, Additional Private Secretary to
the then Prime Minister, contacted Shri T. A. Pai,
Minister for Heavy Industries on telephone and com-
plained against the conduct, of the officers of his
Ministry, who were collecting information from
M/s. Batliboi and Company. Ot\ April 15, 1975,
Shri R. K. Dhawan spoke to Shri A. S. Rajan and
Shri P. S. Bhatnagar on telephone and directed Shri
P. S. Bhatnagar to desist from collecting information
relating to the import of machinery by Maruti Private
Limited. Shri Cavale has corroborated Shri Bhat-
nagar -s statement. He himself received a phone call
the same day from Shri N. K. Singh, Special Assistant
to the Commerce Minister wanting to know what trans-
pired in the office regarding the Parliament Question
on Maruti.

7.73 Shri T. A. Pat was personally called by the
Prime Minister to meet her at her residence. Slur Pai
met the Prime Minister. According to his recollection
it was either on April 14 or 15, 1975. He has stated
that he found Suit. Gandhi "completely upset and
furious". She told Shri Pai that the Management of
M/s. Batliboi and Company was being harassed by
the officers of his Ministry. In. the presence of Shri
Pai, Smt. Gandhi called Shri Dhjawan and directed him
to contact Shri D. Sen, Director, CBI and ask him to
start inquiries into the conduct of these officers and
raid their houses. She also asked Shri Dhawan to send
for Shri D. Sen.

7.74 Smt. Gandhi also called Prof. 3: P. Chatio-
padhyaya, the then Minister of Commerce, at her
residence on April 15, 1975 and directed that
immediate inquiry should' be started against
Shri Bhatnagar because he had caused harassment to
certain parties. ' Shri Chattopadhyaya prepared a
note on April 15, 1975, extract from which is
reproduced below : —

"A specific case was brought to my notice today
where Shri P. S. Bhatnagar, Deputy Market-
ing Manager, P.E.C. kept the representatives
of a firm waiting for an unduly Jons time
and coerced theni to part with certain" infor-
mation. The manner in which (he informa-
tion was sought to be obtained, was un-
becoming of, a public servant. I would tike

the Chairman, P.E.C. to take disciplinary
action against the officers."

Professor Chattopadhyaya in his evidence before the
Commission has stated that he discussed the matter
with the "P.E.C. officers and informed them of what
he had learnt, from the Prime Minister and.- ordered
that disciplinary proceedings should be commenced
against Shri Bhatnagar. According to Prof. Chatto-
padhyaya he did not apply his mind with regard. to the
veracity of the information since it had -come from
the Prime Minister personally and he thought that
the Prime Minister must have full information and
must have satisfied herself about the involvement of
Shri Bhatnagar. Shri Chattopadhyaya has clearly stated
that lie thought that the Prime Minister must have
Jipplied her mind, especially because neither before
that incident nor thereafter had she ever complained
about the conduct of any officer and that was why
he directed the action as suggested by her.

7.75 Pursuant to the order made by Prof. Chatto-
padhyaya, Shri Bhatnagar was ordered to be suspended
and intimation of the order was given to him: some
time ar-about 10 p.m. that night— £& April 15, 1975.

7.76 Shri T. A. Pai, however, had called his officers
earlier and had satisfied himself that there was no
substance in the allegations made against' his officers
to the effect that they were responsible for harassment
of M/s.' Batliboi and Company. Shri Pai had also
contacted the Manager of M/s. Batliboi and satisfied
'himself/fhat the allegations that there was ill-treatment
of tiic.cmpioyees of M/s. Batliboi Limited was without
substance;

7.77 The orders of Smt. Gandhi were, however,
communicated by Shri Dhawan to Slid Sen, Director of
CBI. Shri Sen called the Deputy Director, Intelligence
Cell, Shri Rajpal on April 15, 1975 evening and asked
him to verify the information against Shri Krishna-
swami, Shri Rajan and Shri Bhatnagar, Shri Rajpal
was informed by Shri Sen that all these officers were
corrupt.and had assefs disproportionate to their known'
sources of income. Shri Sen directed Shri Rajpal to
collect information against them immediately find to
furnish a report within five days. On April 16; 1975,
Shri Rajpal directed his subordinate officers to collect
the requisite information and also to mount surveillance
against these three officers.

7.78 Before any verification could be made, Shri
Sen directed Shri Rajpal on April. 16, 1975 to send
to him whatever information was available against
those officers. The relevant files were, accordingly
submitted by Shri Rajpal to Shri Sen. Shri Rajpal',
however, did not recommend any action against these
officers, since the verification had just started. Shri
Sen, however, ordered the registration of regular cases
against Shri Bhatnagar and Shri Rajan. On April 17,
1975, cases were formally registered against Shri Bhat-
nagar and Shri Rajan under the Prevention of Corrup-
tion Act for being in possession of assets dispropor-
tionate to their known means. On April 18, 1975,
their residential premises were searched by the CBI
officers.

flea ,- ; -_ ** _ ^ ^ tf «jfiiiabS^^asiiutiiiBii£«a^

7.79 The S.T.C. authorities, who had control over
Shri Bhatnagar and Shri L. R. Cavale were also gal-
.vanised into- action in pursuance of the note sent by
Shri D. P. Chattopadhyaya. Shri Bhatnagar was serv-
ed with the suspension Order at his residence an the
night of April 15, 1975. Shri Cavale was transferred
to: Madras from Delhi. This order was initially dated
April 16, 1975. Then this order was withdrawn and
a fresh order dated April 15, 1975, with 'identical
contents was again served upon Shri Cavale. The fact
that the date of the transfer order was changed from
April 16 to 15 is significant insofar as the authorities
were anxious to make it appear that there ■ was no
delay in the execution of the orders. Shri Cavale did
not accept the transfer meekly and protested against
the order of the Chairman, S.T.C.

7.80 Shri P. J, Fernandes, Director General, Bureau
of Public Enterprises, took up the matter relating to
the transfer of Shri Cavale with the Chairman of
S.T.C. Shri P. J. -Fernandes was informed by the
Chairman that he was helpless and that he was. acting
under superior instructions. Shri Cavale, then per-
sonally met the Chairman, who also advised him that
in order to avoid further "complications and possible
■harassment", he should accept the order of transfer
and proceed to Madras. Shri Cavale was unwilling
to. accept the advice. The " CBI started verification
on him on April 21, 1975 and he was placed under
surveillance. . The inquiry against Shri Cavale did not
reveal any incriminating material against, him justifying
registration of a case against him. Bui on April 27,
1975, Shri Sen ordered registration of a preliminary
inquiry. Shri Sen also ordered that copies of the '
report of the preliminary inquiry should not be sent
to the usual recipients. The Intelligence Cell was also
asked to collect further information so that the preli-
minary inquiry could be converted into a regular case.
This clearly implied that the preliminary inquiry was
inevitably to be converted irito a regular case. The
Intelligence Cell was, however, unable- to collect any
reliable material on which a complaint could be regis-
tered against Shri Cavale.

7.81 According to Shri K, Vijayan, S.P., he was.
pressurised by Shri A. B. Chaudhary, Joint Director
to write a note suggesting that the house of Shri Cavale
should be searched. Accordingly, Shri Vijayan re-
corded a note, and on the basis of his note the house
of Shri Cavale was searched on May 3, 1975; and a
regular case was registered against Shri Cavale for
investigation under the Prevention of Corruption Act.

7.82 The harassment of Shri Cavale did not, how-
ever, stop at that stage. He was asked by the Chair-
man of the S.T.C. to resign from his office. Shri Cavale
was informed that if he continued to remain in the
office, he may get involved in more trouble and harass-
ment may. increase. Apparently, under pressure, Shri
Cavale submitted his resignation, which was promptly
accepted.

- 7.83 The residential premises of Shri Krishnaswamy
were searched on May 3, 1975. It appears that even
though there were not sufficient materials to warrant
any action against Shri ICris*!inaswamy. On April 27,

1975 Shri Sen desired that a preliminary inquiry should
be registered against him. This was in spite of the
fact that Shri Rajpal was bold enough to point out
to Shri D. Sen repeatedly that Shri Krishnaswamy had
a good reputation, his standard of living was moderate
and that he came from a well-off family. Here also
it was directed that the registration report should not
be sent to the usual addresses, ostensibly, to maintain
secrecy! On April 27, 1975, the Joint Director, Shri
Chaudhary, indicated that after more information was
available, the preliminary inquiry would be converted
into a regular case. The case was, accordingly, regis-
tered on May 2, 1975 and the house of Shri Krishna-
swamy was searched on May 3, 1975. Shri Krishna-
swamy, who belonged to the Railway Service and was
on deputation with the Ministry of Industries, proceed-
ed on August 18, 1975, on four months' leave, in view
of his continued harassment. This leave was extended
on half-pay. In February, 1976 Shri Krishnaswamy
was reverted to his parent cadre in the Railways. Even
thereafter the CBI apparently tried several methods
to scrutinise all the files, which Shri Krishnaswamy
had dealt with in the performance of his duties in the
Industries Ministry. Nothing incriminating was found
against him. A case under the Excise Act was insti-
tuted by the Delhi Police, at the instance of the CBI
for alleged possession of liquor beyond the permissible
limit discovered during the search of the residence of
Shri Krishnaswamy.

7.84 The trial court did not fine! Shri Krishnaswamy

guilty of any violation and acquitted, him on March
4, 1977.

7.85 Wife of Shri Krishnaswamy was also, harassed

on certain allegations of being involved in some Foreign
Exchange transactions. Even the bank locker of the
father of Shri Krishnaswamy, a former officer of the
Government of India in the Indian Audit and Accounts
Service was searched at Madras.

7.86 In the proceedings taken against ail the four
officers, pursuant to which cases were started by the
CBI practically nothing was' ^.detected and ultimately
the proceedings under the Prevention of Corruption
Act relating to the allegation of possessing assets dis-
proportionate to the known sources of income were
abandoned in all the cases.

7.87 All the four officers were examined by the
Commission. At the preliminary stage the affidavit of
Shri Rajan was read out as he was not available. He
appeared at the second stage of the inquiry and he was
examined by the Commission.

7.88 From the sequence of events it appears that
afier the four officers attempted to collect information
in the performance of their duties between April 9 and

15, 1975, to enable the Minister concerned to reply
to the Starred Question before the Parliament on April

16, '1975, Shri Dhawan -spoke to Shri Rajan and Shri
Bhatnagar On telephone and told Shri Bhatnagar not
to make any • inquiries concerning Maruti Private
Limited. Either on April 14 or 15 and more probably
on April 15, 1975, Shri T. A. Pai was summoned to
the house of the Prime Minister and lie was told by

62.

the Prime Minister that the Management of M/s.
Batliboi and Company was being harassed by the
officers of his Ministry. To use the words of Shii Pai :

"She started talking about corruption, tfeat my
officers were talking about it and all that
and they are corrupt themselves and what
she said was not quite relevant. 1 could
not make out because she was so furious and
angry; that before I could answer, she had
called Shri Dhawan and asked their houses
are to be raided and Shri Sen to be sent
for."

Shri T. A. Pai, however, on inquiries made by him
found the charges baseless.

7.89 Prof. Chattopadhyaya, however, consulted his
officers and action was taken against Shri Bhatnagar
by suspending him forthwith.

7.90 Shri Dhawan has, in his evidence before the
Commission, denied that Smt. Gandhi had told him
anything regarding action to be taken against the
officers of the Ministries of Heavy Industries and
Commerce in the presence of Shri T. A. Pai; but he
stated that he was directed by Smt. Gandhi lo contact
Shri D. Sen and to check the antecedents of the four
officers concerned. Accordingly, Shri Dhawan con-
tacted Shri D. Sen. According to Shri D. Se-n, Shri
Dhawan came to him personalty in his office and gave
the information. Shri Dhawan is not certain whether
he talked to Shri Sen on telephone or personally. The
version of Shri Dhawan, to quote his own words is t

"Chairman : Did you go, at the instance of the
Prime Minister to Mr. Sen, or in your capa-
city without an order from the Prime
Minister ?

Witness : No, I did not go in my own capacity.
Since the complaints had come to the Prime
Minister and the Prime Minister said that
there are complaints about them. We should
check about antecedents. So, I had passed
on this information to Mr. D. Sen, that tiie
Prime Minister had re:eived complaints about
these officers.

Chairman i Were you asked by the Prime Minister
■ to go ?

Witness : Yes, I was given the names to pass
on this information on to Mr. Sen only to
' check ?

Chairman : By the Prime Minister ?

Witness : Yes, by the Prime Minister.

Chairman : Did you tell Mr. D. Sen that the
Prime Minister had given this information to
you?

Witness; Wei!, I do not remember at this stage
that I think she must have definitely, told
me; otherwise I do not have any locus stand 1
on my own to say."

7.91 Shri Sen maintained no record of the commu-
nication made by Shri Dhawan to him, but uiidisput-
ably the machinery of the C.B.I, was moved into swift
action against the four officers concerned. Shri Bhat-
nagar was immediately suspended and an order to that
effect was served upon him the very same night. Secret
inquiries were started agaiinst Shri Rajan and Shri
Bhatnagar, and soon thereafter regular cases were
registered against them.

7.92 The activities of the officers performed in the
discharge of their duties were apparently not liked by
Smt. Gandhi. The evidence does not disclose that
there was any harassment of the officers of M/s.
Batliboi and Company. Two representatives of M/s.
Batliboi and Company have been examined, namely,
Shri Adeshra and Shri Mathur and they have denied
that anyone, either Shri Bhatnagar or Shri Rajan had
come to the office of M/s. Batliboi and Company and
they have also stated that it is not true that any repre-
sentative of M/s. Batliboi and Company was insulted.
They have also stated that they had made no complaint
to anyone. Even though, there was, therefore, no case
of any harassment of any officials of M/s, Batliboi and
Company, stringent measures were apparently taken
in reprisal against the action taken by Shri Bhatnagar
and Shri Rajan in the performance of their duties.
These officers were performing their duties and collect-
ing information which had to be supplied to the Minis-
ter so as to enable him to answer the question before
the Parliament on April 16, 1975. The houses of
both these officers were searched without any reason
and nothing incriminating had been found.

7.93 Regular cases under Prevention of Corruption
Act were registered against Shri Krishnaswamy and
Shri Cavaie and their houses were raided by the' CBI.
Against Shri Krishnaswamy proceedings were taken
under the Excise Act and also against his wife for an
alleged infringement of the Foreign Exchange Regu-
lation. Shri Krishnaswamy was also reverted to his
parent (Department and Shri Cavaie was pressurised to
submit his resignation when he showed his unwilling-
ness to carry out the transfer orders. Shri Cavale's
wife also lost her job on account of the steps taken
against him.

7.94 Shri T. A. Pai sent a letter to the Prime
Minister on or about May 5, 1975, after the searches
of these officers had taken place and narrated the ac-
tion which was taken against them. Smt. Gandhi, by
her letter dated May 7, 1975, replied that in the
course of the searches the CBI had found that (he
officers in question seemed to be in possession of
assets disproportionate to their known sources of in-
come. She in her letter had stated that the information
against the officers had been received by the CBI
while Shri Dhawan in his deposition before the Com-
mission has stated that he had passed on the informaT
tion to the CBI at the instance of Smt. Gandhi. She
had also written in that letter that these officers did
not seem entitled to any support. Smt. Gandhi had
enclosed a note from (he CBI . which explained the
position in some detail, But this assertion appears to
have been proved unjustified. ■ It may be sufficient
to observe that at the conclusion of the investigation,

■x:^::zir i Ktt--'&?j&^yysr¥&Z?* I

nothing was disclosed and the entire proceedings start-
ing with the searches were undertaken merely because
information was received by Shri D. Sen from Shri
Dhawan at the instance of Smt. Gandhi. The said
information" was supported by no other useful evidence,
Shri Sen in his evidence was unable to throw any
light on the finding of any assets disproportionate to
the known sources of the income of these officers.
The cases under the Prevention of Corruption Act
were ultimately dropped.

7.95 Smt. Gandhi has not filed any statement in
reply to the notice under rule 5 (2) (a) of the Rules
nor has she chosen to give evidence in pursuance to
the summons issued under section 8B of the Act.
Shri Dhawan has denied that in the presence of Shri
Pai he was asked by Smt. Gandhi to have the houses
of the four officers searched. He has stated that some
MPs and others had complained to Smt. Gandhi
about the corruption prevailing and about the four
officers in particular and he had conveyed ihis infor-
mation either personally in the office of Shri D. Sen
or on telephone. It is indeed a strange coincidence
that the MPs were complaining only against the offi-
cers who were engaged in the collection of information
relating to Maruti. Between the testimony of Shri
T. A. Pai and Shri Dhawan viewed in the light of the
rest of the evidence, the Commission has no hesitation
in accepting the testimony of Shri T. A. 'Pai.

7.96 The evidence in the view of the Commission
discloses a gross abuse of the authority vested in
Smt. Gandhi. She had taken into her head to act as
she did merely because the officers of the Commerce
and Industries Ministries had, in the discharge of
their duties taken steps to acquire information which
was likely to affect the interest of Maruti Limited.
She pressurised Shri Sen to take proceedings for search-
ing their houses and for fifing complaints against them
under the Prevention of Corruption Act, which were
wholly unjustified and which were eventually dropped.

7.97 A notice under rule 5(2)(a) of the Rules and
summons under section 8"B of the Act Were issued
also, to Shri R. K, Dhawan and Shri D. Sen. They
■appeared before the Commission and led evidence in
suppoit of their defence. Shri D. Sen has also filed
his' sin foment lit response to rule 5(2)(a) notice,

7.98 The role of Shri R, K. Dhawan appears to
have been merely to convey the message of Smt.
Gandhi to Shri D. Sen. Beyond that no other action
can be attributed to him, which in turn could be in-
terpreted to have activated the subsequent processes of
law that were set in motion by Shri Sen. According-
ly, therefore, the Commission does not take a serious
view of the activities of Shri R. K. Dhawan in this
case.

7.99 Shri D. Sen, in his statement filed in response
to. the notice under rule 5(2)(a) has stated that in
accordance with the provisions of section 157 Cr. P.C.
he had to register cases against those Officers after
having received the information from Shri R. K.
■Dhawan and that, in fact, if he had delayed the regis-
tration of the cases, it might have been dereliction of

duty on his part and he could have been blamed for
that. This contention is not tenable if only for the
reason that registration of cases under section 157
Cr. P.C. should have been preceded by the availability
of information which, prima facie, makes out an
offence.

7.100 In the present cass the information brought
on record by the Intelligence Unit after the secret
inquiries, was not of a nature which could be said
to have constituted, prima jade, commission of an
offence by the officers concerned. It was also noticed
that Shri D, Sen had no valid explanation for his not ;
recording in writing the. exact information that he had
received from Shri R. K. Dhawan at the instance of
Smt. Gandhi. Repeated questions put by the Com-
mission to Shri D. Sen on this point failed to evoke
any useful reply.

7.101 The conduct Of Shri Sen discloses that lie
has misused his authority in directing that First In-
formation Reports be filed against all the four officers
and in starling proceedings against them.

7.102 The evidence, therefore, discloses that Smt.
Gandhi was responsible for institution of criminal
proceedings against the four officers concerned, having
their houses searched and subjecting them to humilia-
tion; merely because they were responsible for collect-
ing information in the discharge of their duties, which
would have been prejudicial to the interests of Maruti
Limited, a concern in which Shri Sanjay Gandhi, her
son, was vitally interested.

7.103 This case brings into focus certain undesir-
able aspects of the functioning of the CBI which in
the view of the Commission need to be looked into-
immediately with a view to prevent a recurrence of the
type of abuse of authority and misuse of power by the
Director, CBI, in future. It is imperative for the CBI
to realise that in setting afoot a series of actions
against individuals — whether officials or non-officials — ■
they are irretrievably damaging the reputation and
social standing of the individuals concerned. They
should not, therefore, be allowed to initiate proceed-
ings against anyone unless it is ensured that the facts
on record warrant the type of proceedings that they
launch on.

7.104 In the present case there was nothing against
any of the four officers except the vague complaints*
if at all, allegedly made by the MPs and conveyed to
the Director, CBI by Shri Dhawan at the instance of
the Prime Minister. Initial enquiries actually reveal-
ed nothing specific against any of them. Rather Shri
Krishnaswamy was reported to be enjoying a good re-
putation. And yet the CBI mounted the whole series
of actions in their armoury at the end of which nothing
incriminating was found. But in the process the CBI
had destroyed these officers socially, physically ' and
morally. Now that we have seen that even the man at
the top of the CBI with all his seniority and status
can still lend himself and his organisation to serve
purposes other than strictly legal, constitutional and
moral, it has to ba ensured that in future no such
individual or organisation should be capable of being

rendered a helpless and unquestioning tool in the
hands of the powers that be. The Commission feels
that certain safeguards need to be provided by making
the Director CBI accountable to an independent body.
Yet another suggestion can be that the Director CHI
may be statutorily rendered independent of the exe-
cutive Ministry and his term of office made subject, to
a tenure.

9. Unlawful detention of Textile/ Customs employees
under MISA by Delhi Administration and institu-
' don of false CBI cases against four of them.

7.105 S/Shri B. D. Ghosh, A. K. Chakravorty,
R. C. Jain, S. K. Walia, R. Rangaraja, R. S. 'Gupta,
C. S. Venkatesh, V. B. Bhambri and Asutosh Mukher*
jee were working as Inspectors in the Regional Office of
Textile Committee Delhi during April-May, 1976.
Shri S. N. Chatterjee was the Assistant Inspecting
Officer in the same office. The Inspectors working
in the Textile Committee Office were required to
obtain from the Textile Committee a certificate to
the effect that the fabric from which the garments were
made was mill-made or handloom. The Textile Com-
mittee is required to ensure that no garments which
are made out of mill-made cloth are mis-declared as
made from handloom fabric. During the same period,
S/Shri Sumer Singh Yadav and M. S. Malik were
working as Customs Inspectors at Palam Airport and
they used to deal with exports. Their duty included
enforcing Export Trade Control Restrictions in the
matter of exports and also ensuring that correct rates
of 'draw back' are granted to the exporters. 'Draw
back' is a refund of central excise duty to the exporter
when the goods are exported out of the country, the
rate varying, depending on the incidence of duty on the
item of raw materia],

7.106 On April 22, 1976, Shri S. S. Yadav, who
was one of the Customs Inspectors, was told by his
Superintendent to draw samples from the consignment
of certain packages belonging to M/s. Indira Interna-
tional for determining, for draw-back purposes, whe-
ther the garments were actually of mill-made cloth, as
claimed by the exporters, or of power-loom cloth.
Pending the furnishing of the samples, the export of
the consignments had not been permitted. On the
basis of the samples drawn by Shri Yadav, he was of
the view that the exporters had misdeclared the goods
for obtaining illegal benefit of draw-back at a higher
rate. Sim Yadav tried to explain to the Clearing
Agent of M/s. Tndira International that the firm was
cheating the Government by mis-declarine that the
garments were made out of mill-cloth while actually
they were made out of nower-loom cloth. On this
occasion, the Customs Officer was threatened and
told that the consignment belonged to the mother-in-
law of Shri Sanjav Gandhi, the son of the then Prime
Minister Smt. Indira Gandhi: and that (he "officers will
have to pay the nrice for the hold-un of the consign-
ment". Out of fear, the Customs Authorities allow-
ed their consignment to be exported without any
action.

7.107 Shri R. D. Bhatnagar. one of the Insoectors
in the Textile Committee, had visited M/s. Indira In-
ternational in the course of his official business. Ear-
lier to that Shri A. K. Chakravorty, another Textile

Inspector, had rejected a consignment of ready-made
garments of M/s. Indira International. When Shri
Bhatnagar met Smt. Doddy of M/s. Indira Interna-
tional, she appeared very much annoyed and threaten-
ed that if shipments were rejected or delayed by the
officers of the Textile Committee, she would see that
drastic action was taken against the officers.

7.108 Shri Suri had been told by Shri S. K. Mocli
of Modi Yarn Mills and also by Shri Kapoor, Manager
of the Indira International, that Shri Sanjay Gandhi's
mother-in-law was interested in the Indira international
and that ihey should take care that the him had no
trouble in the transaction of their business.

7.109 Some time in the last week of May, 1976,
Shri S. C. Suri, Inspecting Officer in the Textile Com-
mittee's office, was rung up by Shri N, K. Singh, Spe-
cial Assistant to the -then "Commerce Minister, Shri
D. P. Chattopadhyaya, requiring Shri Suri to furnish
urgently the addresses and dates of posting of all the
inspecting staff in the Textile Committee. Shri Suri
has stated before the Commission that Shri N, K.
Singh had told him that he would be token to task if
the information asked for by Shri N, K. Singh was not'
furnished Eo him within half an hour.

7.110 Shri N. K. Singh has stated that he had asked
for a list of names of the Textile Inspectors on an
urgent basis from Shri Suri, who, he had been told,
would be the right person to collect and furnish thef
information on a priori ty basis. This information was
required by him as, earlier' to that, Shri R. K. Dhawan,
Additional Private Secretary to the Prime Minister,
or Shri V. Ramachandran, Joint Secretary in the
Prime Ministers Secretariat, had rung him up asking
for a list of the Textile Inspectors as it had been com-
plained to the Prime Minister that Shri D. P. Chatto-
padhyaya, the Minister, was showing special favours
to the Bengalees. He had brought this allegation 1 to
the notice of the Minister who had told him to collect
the information and pass it on to the Prime Minister's
Secretariat. The information was furnished bv .Shri
Suri to Shri N. K. Singh, who in turn passed it on' to
Shri R. K. Dhawan. Shri N. K. Singh has also stated
that he had been told' by either Shri R. K. Dhawan
or Shri V. Ramachandran that the information was rc-
cmired bv the Prime Minister. Shri R. K. Dhawan
has stated that he had rung up Shri N. K. Singh and'
conveved to him the information that had come to the
notice of the Prime Minister regarding the alleged
nepotism pf the Minister. Shri D. P. Chattooadhyava.
Shri Dhawan denies that he had mentioned to Shri
N. K. Singh that the matter was urgent. The question
of asking for the list itself had arisen out of the
discussion that he had with Shri N. K. Singh. Later
he had received some unsigned list, giving the names
of certain officials in the Textile Department, giving
the dates of appointment and their other particulars;
Shri Dhawan had shown the list to the Prime Minister!
According to Shri Dhawan. the list of names was given
by him to Smt. Gandhi and it remained with her.

7.111 Shri A. P. Mukhertee, DIG, CBI, has stated
before the Commission that some time towards the
end of Mav. 1976. Shri P. S. Blunder, the then DIG
(Range) of Delhi Police had informed him that he

rtt!-;&2T<&V~-X?™: .-'.: ."^■.:-''""':

had received some information from the Prime Minis-
ter's House about corruption and harassment by some
officers of Excise/Customs/Export Promotion Council
in the matter of export of garments by various expor-
ters. Shri Mukherjee had told Shri Bhinder that the
Delhi Branch of CBI had no information on the sub-
ject. Thereafter he set about collecting whatever
information was possible on the subject through its
.officers. Even before Shri A. P. Mukherjee could
cellect any worthwhile information on which any action
could be contemplated, he came to know that 12
officers of the Textile Committee/Customs had been
arrested under MISA by the Delhi Police, Thereafter,
he discontinued his- efforts to compile any further
information on the subject.

' 7.112 According to Shri Blunder's testimony before
the Commission, he had spoken to Shri A. P. Mukher-
jee, DIG, CBI but had not mentioned to him that
the information had originated from P.M.'s House.
There is no reason why Shri A, P. Mukherjee should
have said that Shri Bhinder had told him that the
information had originated from the P.M.'s house if in
fact Shri Bhinder had not told him so. Shri Mukher-
jee was not in any way connected with any of the
transactions regarding arrests of the officers concerned
which subsequently followed and he was in no
need of any excuse to drop names to cover his doings.
Shri Bhinder has stated that he had got the information
from exporters about the corruption indulged in by
the Textile/Customs Officers. In the course of his
examination by the Commission, however, he could
not name the person who had given him this informa-
tion, nor had he kept any record of the information.

. 7.113 The subject of dealing with the corrupt offi-
cers generally under MISA had, it appears, been discus-
sed by Shri Bhinder with the senior officers of the
Delhi Administration and a policy decision to that
effect had also been taken. According to him, he
had told Shri Balwant Singh, SP (Anti-Corruption)
of the Delhi Administration to collect the list of names
of officers indulging in corruption and Shri Balwant
Singh had furnished him that list, which formed the
basis for action that was subsequently taken against
the officers. Shri Balwant Singh in his statement before
the Commission however, denied having furnished any
such list of corrupt officers to Shri Bhinder, though
Shri Balwant Singh had said that at the instance of
Shri Blunder he had detailed his officers to associate
with the CBT officers in interrogating the Textile/Cus-
toms officers who had been earlier arrested by the
Delhi Police under sections 108/151 Cr. P.C. and
later on detained under MISA. Shri Bhinder has
tried to deny that the arrest of the Textile/Customs
officers oh fabricated grounds under sections' 10S/151
Cr. P. C. was done at his instance, though the SPs.
particularly Shri R. K. Ohri, Superintendent of Police
(Central District), have categorically stated that instruc-
tions for these arrests originated from Shri Bhinder.

7.114 Smt. Shailaja Chandra has stated before the
Commission that though the subject of arresting gene-
rally the corrupt officials under MISA had probably
been discussed in the Apex Committee meeting, still
the decision was intended to be applicable only to the
S/39 HA/77— 10.

officials of the Delhi Administration and not to the
Central Government employees. In the present case,
all the employees were Central Government employees.

7.115 Delhi Police struck in the first week of June,
1976. The concerned Superintendents of Police were
supplied the names of the officers of the Textile Com-
mittee/Customs by Shri Bhinder who ordered their
immediate arrest and detention under MISA because
they were indulging in corrupt practices and anti-
Government activities. The SPs were also informed
that District Magistrate will give instructions to .the
concerned ADMs for issuing the detention orders under
MISA, and that in the meantime "in accordance with
the prevalent practice" the officers should be arrested
under the preventive sections of the Criminal Procedure
Code so that they did not evade arrest by going under-
ground. The SPs passed on the orders to their SHOs
after confirming with the concerned ADMs and the
arrests, followed. The ADMs who had issued the
MISA detention orders have all said in their state-
ments that they issued the detention orders merely
on the directions of the District Magistrate.

7.116 Customs Inspectors Yadav and Malik were
picked up from their office in the afternoon of June 1,
1976, by the Police on some false pretext and locked
up. Textile Inspectors Walia,"Bhambri, Rangaraja and
Asstt. Inspecting Officer Chatterjee, were whisked away
from their homes in the late hours of night on the same
day. The other Inspectors Ghosh, Gupta, Venkatesh,
Chakravorty, Jain and Mukherjee were arrested sub-
sequently at the convenience of the Police between
2-6-76 and 5-6-76.

7.117 Shri Bhinder has admitted before the Com-
mission that he had not obtained the permission of the
concerned Ministries before arresting these officers.

7.118 All these officers were initially arrested under
the preventive sections of Criminal Procedure Code
(108/151) on false and fabricated allegations. Ins-
pector Yadav and Inspector Malik who were arrested
from their office premises were alleged to have raised
slogans protesting against the Emergency and were
plotting to overthrow the Government. Inspector
Bhambri was charged with instigating the people against
the Government in a public speech allegedly made at
5.30 in the morning on June 2, 1976 in Ajmal Khan
Park, while actually he was picked up from his house,
earlier at 12.30 at night and. locked up at the police
station. The other Inspectors were also arrested on
similar false allegations*

7.119 All these respectable Government officers
were handcuffed by the police while being taken to the
Court or to the Jail. Some of them were made to
travel in the public buses where they were seen by
general public. After a mechanical production before
the Magistrate where none of them was given a hear-
ing or offered bail, they were sent to Tihar Jail. With-
in a few days of their arrest, the detention orders under
MIS A were duly served on them' at Tihar Jail. The
grounds of detention in the MISA orders in respect of
the Textile Committee officers were that "in the

course of inspection of textile material meant for ex-
port, the officers were showing undue favour to the ex-
porters by stamping the sub-standard textile for export
to foreign countries which is bringing bad name to the
country" and also that the officers "have been indulging
in malpractices and acting against the national interest".
In respect of the Custom Officers the grounds of deten-
tion were that they were "conducting themselves in a
manner prejudicial to the maintenance of public order
while working as Inspectors in the Air Cargo Unit of
Palam Airport." The charges under sections 108/
151 Cr. P.C. on the basis of which these officers were
initially arrested were subsequently dropped in view
of their detention under M1SA.

7.120 A meeting took place between Shri D. Sen,
Director, CBI, and Shri Blunder, in the office of the
CBI after the arrest of the Textile/Customs officers.
At this meeting, Shri Bhinder is reported to have said
that he was 100% satisfied that these officers were
corrupt. According to Shri Sen, he came to know
about the arrests of the officers when the annoyance
of the Commerce Minister was conveyed to him by
someone whom he does not remember. After he
heard from the Delhi Police or from the Commerce
Ministry about the arrest of these officers, the CBI
decided to move in the matter since there were also
charges of corruption against them. He had directed
Shri Rajpal to collect whatever intelligence was avail-
able regarding corruption against these officers. Ac-
cording to him he left it to Shri A. B. Cfraudhary,
Joint Director, to take appropriate action after the
collection of the required information against the con-
cerned officials.

7.121 A perusal of the CBI file makes a very dist-
ressing reading. At the instance of the Director,
CBI, the CBI officials moved into action in an
effort to collect information against the officials to
substantiate the charge of corruption against them.
Shri Y. Rajpal, D.I.G. in-charge of the Intelligence
Unit of the CBI has stated that it was obvious to him
that Shri Sen had already made up his mind to regis-
ter cases. In the process a couple of CBI officers
associated themselves with the S.P.- (Anti-Corruption)
of Delhi Administration and interrogated the arrested
officers in the Tihar Jail. Separately their houses
were also kept under watch. As a result of all these
efforts,- some information was obtained against only
four of the arrested officers about their having certain
assets. No effort was, however, made to ascertain
whether or not these assets were in fact disproportion-
ate to the known sources of their income. It does
not appear from the record that any inquiries were
made to ascertain whether the officers who had declar-
ed ceitain assets had come by those assets through
sources other than their pay. On the basis of the
perfunctory efforts made by the CBI officials, regular
cases under the Prevention of Corruption Act were
registered aeainst four officials, namely Shri S. N,
Chatteriee. Shri Asntosh Mukheriee. Shri S. S. Yadav
and Shri M. S. Malik. Almost identical FIRs were
registered against each of these four officers and their
houses were searched. Thev did not even spare the
house of the son-in-law of Shri Malik whose house
was also searched by CBI, The searches revealed

nothing. Suffice it to say that after all the investiga-
tion that followed, the CBI had to drop all the four
cases started against these four officers under the Prer .
vention of Corruption Act. But in die meantime the
CBI under Shri D. Sen had done irreparable damage
to these officers for no fault of theirs.

7.122 Director CBI, Shri D. Sen, showed extra
keenness to register cases against these four officers,
though the material available on record did not war-
rant the action that followed. On the other hand, when
it came to dealing with Shri Bhatnagar and Shri Sun,
Shri Sen adopted a different yardstick. Shri R. K.
Gupta. S. P. and his DIG Slid Rajpal were persistent in
their suggestion to Shri Sen that the material available
on their record warranted action against them. Shri
Sen evaded the issue by asking for yet more material,
and eventually Shri D. Sen decided that the material
collected against them be forwarded to the Department
concerned for appropriate action.

7.123 The Commission cannot help feeling that
Shri D. Sen applied invidiously different standards in
dealing with the two sets of officers.

7.124 The relations of some of the detained officers
ran from pillar to post in an effort to secure the
release of the officers. In the process, they knocked
at the doors of the Commerce Minister, Shri D, P.
Chattopadhyaya, Shri N. K. Singh, the Special Assist-
ant to the Commerce Minister, Shri Bhinder and the
Prime Minister. Shri D. P. Chattopadhyaya has
stated that he felt very bad about the whole thing and
yet felt helpless in the prevailing circumstances. In his
statement before the Commission he had said that there
was an element of competition between the Delhi Ad-
ministration and CBI to take the laurels for these un- '
justified detentions. Shri Qadam Singh, who is
one of the relations of Shri Yadav, had even ventured
and gone to meet Shri Sanjay Gandhi in the Maruti
Factory in an effort to get Shri Yadav released, but
Shri Sanjay Gandhi is reported to have told him that
he deserved to be taught a lesson.

7.125 Shri S. M. Vohra, one of the Custom
officials who had known Shri Bhinder, had also met
Shri Bhinder in an effort to get the officers released.
S'h. Bhinder at that time is reported to have told
Sh. Vohra that only Sanjay Gandhi could help in the
matter as he was annoyed over the objections made
by Shri Yadav in relation to the consignment of
exports by his mother-in-law.

7.126 Shri S. K. Walia's release was secured some
time in September and it appears, on the admission
of Shri R. K. Dhawan in the course of his statement
that Shri Walia is one of his relations.-

7.127 The matter regarding the release of the
arrested officers had come up before the Screening
Committee of the Delhi Administration. Shri Krishan
Chand in his statement has said that the cases of the
Taxtile/Customs officers were placed before him in
the Screening Committee. Pie admits that in the
meeting held on 16th November, 1976, Shri Bhinder
told him that he would like to speak to him separately
regarding these cases before any decision is taken,

. TVjl^^Ml^fcJltf^AB

. I _„

Accordingly, both Shri Bhinder and Shri Krishan
Chand had adjourned to the ante-room where
Sh. Bhinder told him that the release of t'hese officers
was not to -be considered as "these were the orders
from the higher-ups". Slui Krishan Chand has said
that he had understood "higher-ups" to . mean
Sh. Saujay Gandhi, That Sh. Bhinder and Sh. Krishan
Chand had a word with each- other separately at the
time of the Screening Committee meeting is also borne
out by Shri T. R. Kalia, Deputy Secretary, Home,
Delhi Administration, who was present in that
meeting. Shri Bhinder in his statement has, however,
said that he had spoken to. Sh. Krishan Chand
mentioning that he- should consult Sh. Om Mehta
before deciding to release the inspectors. He,
however, denies having told Shri Krishan Chand about
the orders from the "higher-ups".

7.128 The story of the arrest and detention of the
Textile Inspectors makes a very sad reading. Going
entirely by the facts available on record, it has no-
where been established that tiiese officers were corrupt
or had done anything which could even distantly be
interpreted as improper or incorrect. On the contrary,
some of them had acted courageously and correctly
in the discharge of- their .-duties and this proved to be
their undoing. In ; thfe' process they had antagonised
the proprietors £&.' M s. jhdira International whose
financial interest with- : Kie mother-in-law of Sh. Sanjay
Gandhi stands proved on- the basis of documentary
evidence. The relevant income tax records of
Smt. Anteshwar Anand, mother-in-law of Sh. Sanjay
Gandhi were produced before the Commission, on the
basis- of whicjb. it is fully and completely established
that Smt. Anteshwar Anand had considerable
. financial interest in the firm M/s. Indira International.
In the year ending 31st March, 1976 and 31st March,
1977, substantial amounts had been received by
Smt. Anand from M/s. Indira International as
commission, as proved by the Income-Tax Returns
of Smt. Anteshwar Anand, produced before the
Commission by the Income Tax Officer,

7,129 The list of the Textile Inspectors' was
obtained by Shri N, K. Singh at the instance of
Shri R. K. Dhawan and the list was passed on by
Sh. N. K. Singh to Sh. R. K. Dhawan, who in turn
had passed it on to Smt. Gandhi. The contention
that the list of Textile Inspectors was required only
to- check or verify the allegation regarding nepotism
by Sh. D. P. Chattopadhayayti with regard to Textile
Inspectors does not appear to be correct. If this list
was required only for deciding the issue with regard
to the allegation of nepotism against Sh. D. P. Chatto-
padhayaya, how could this conclusion be arrived
at correctly by obtaining only the list of Textile
Inspectors — a small group of officers in a Ministry
which has hundreds of other employees distributed
over a large number- ot Departments. It appears that
the list furnished by Sh. N. K. Singh to Sh. Dhawan
was given to Smt. Gandhi, and from Smt. Gandhi it
appears to have gone to Sh. Bhinder who thereafter
cracked down on a few- selected officers. The
contention of Sh. Bhinder that he got the list from
Sh. Balwant Singh is not tenable as this does not
explain how he got within that list, the names, of just

the two Customs Officers who happened to have
antagonised M/s. Indira International. Shri Balwant
Singh himself lias denied having furnished any list to
Sh. Bhinder.

7.130 Sh. Bhinder on his own admission has been
the prime mover in the sordid story o'f these arrests
and detentions.

7.131 After the preliminary stage of hearing in

this case, the Commission had given a notice under
Rule 5(2) (a) of the Commissions of Inquiry Rules
and summons under section SB to Smt. Indira,
Gandhi, Sh. D. Sen, Sh, R. K. Dhawan, Sh. P. S.
Bhinder, Sh. N, K. Singh and Sh. Balwant Singh.
Smt, Gandhi (hough she responded to the summons,
did not submit her statement as required under
Rule 5(2) (a) and also refused to be examined on
oath. The remaining four had responded to the
notice and the summons. The Commission-has taken
into account the versions o£ Sh. N, K. Singh,
Sh. Balwant Singh and Sh. R. K, Dhawan. The
Commission is satisfied that they had played a very
, limited role each in- their respective fields and they
cannot be held responsible for the arrest and detention
that followed nor for the CBI cases that were mooted
against four of these officers.

7.132 Regarding Shri D. Sen and Sh. P. S. Bhinder,
the Commission, before coming to its conclusion on
the part played by them, has taken into account their
written statements as also the evidence brought on
record by the statement of witnesses whom they had
examined and also chosen to cross-examine.

7.133 Shri D. Sen appears td have lent -himself
and his organisation for purposes other than those
which are strictly within the terms of the charter of
the CBI. It cannot otherwise be understood how
he could have mounted the cases of corruption against
the four officials, searched their houses including the
house of the son-in-law of one of the officers, unless
it was at the instance of Shri Bhinder. The entire
action by the CBI under Shri D. Sen was initiated on
grounds, which were totally inadequate and
imaginary. As against this, he let off without any
action two officials against whom there was adequate
material to warrant prosecution under the Prevention
of Corruption Act. He has grossly misused his
position as the Director, CBI, and abused his
authority.

7.134 The Commission feels that Smt. Gandhi has
abused her authority and misused her power in having
caused the arrest and detention of these 12 officers
without adequate justification and using the CBI to
set in motion criminal cases against four of them, all
of which had to be abandoned eventually for want of
any material,

7.135 Shri Bhinder has been the hatchetman and
he went about the arrest and detention of these
officers without any justification whatever. He was
also ''responsible along with Shri D. Sen to get the
CBI to register cases against four of these officials,
He has grossly abused his authority and misused his
power.

10. Misuse of powers and miscarriage of justice in
saving Shri Sudarshan Kumar Verma, a clerk in
the Railways, from legal punishment by the CBI
officials.

7.136 On information furnished by Sh. Gopal Das,
a loco-shed man, that Shri Sudarshan Kumar, a clerk
employed by the Northern Railway was demanding
illegal gratification as consideration for fixing the scale
of pay of Shri Gopal Das, a case was registered and
arrangements were made by the CBI Delhi Branch,
to trap Shri Sudarshan Kumar when receiving the
bribe. Shri Sudarshan Kumar was caught in the
actual process of demanding and receiving bribe.

7.137 Shri Verma appears to have had access to
the Prime Minister's household and he got in touch
with his contact.

7.138 Shri D. Sen, the Director of CBI was asked
by some one from the Prime Minister's house to look
into the case.

7.139 A complaint was lodged and investigation
was completed. Prosecution of Shri Verma under
section 161 of the Indian Penal Code and section 5(2)
read with section 5(1) (d) of the Prevention of
Corruption Act was sent to the Vigilance Officer,
Northern Railway on January 31, 1976.

7.140 Normally, the Director of CBI handles
important cases dealing with high officers, whereas
cases involving non-Gazetted officials are dealt with
at the Branch level and neither the Director nor the
Joint Director is concerned with such cases. But, in
this case, shortly after the case against Shri Verma
was registered, the Director, CBI, Shri Sen' called
Shri A. P. Mukherjee, DIG, CBI, Delhi Branch and
called for the case papers.

7.141 After the recommendation regarding' the
prosecution of Shri Verma had been sent, the Director
desired that the case should be examined once again.
Thereafter, the DIG discussed the feasibility of getting-
back the SP's report from the F„ailway Department.
A Superintendent of Police was sent to the Railways
to contact Shri Prasad and Shri Dayal of the Railways
to retrieve the report but his attempts were unsuccess-
ful.

7.142 After they failed to retrieve the report from
the Railways, Shri Verma submitted a representation
some time in September, 1976, to Shri Sen with a
request that the case should be reconsidered. Shri Sen
then desired that the Delhi Branch should send the
comments on the representation and these comments
should be sent to him through the Joint Director,
Shri A. B, Choudhary. Shri A. P. Mukherjee of
Delhi Branch sent his comments on the representa-
tion of Shri Verma, He was of the view that there
was no substance in the representation. Shri A. P.
Mukherjee had taken a courageous stand even at this
stage when he should have been in no doubt about
what his superior officer desired. Comments were
put up by the Delhi Branch and on September 9,
1976, Shri Choudhary called the DIG to come and
see him with the case records. This was accordingly

done by- Shri Mukherjee. The case was discussed
and it was ultimately decided that a Junior Law
Officer should examine the representation and give
his views. Thereafter, the matter was sent to
Shri Jamuar, who gave his comments first finding that
there was no substance in the points raised by
Shri Verma, and also that the representation could
make no impact on the prosecution case in a court
of law. But he suggested that certain circumstances
might be relied upon by Shri Verma at the trial and,
therefore, there was justification for reconsideration
of the case. It was mentioned by Shri Jamuar that
at the time of the trap the independent witness, who
had seen the acceptance of the bribe and had over-
heard the conversation, was with the CBI Inspector,
and, therefore, Shri Verma could take the plea that
the independent eye-witness was under pressure cf
the police officer. He also suggested that at the time
of the search of Shri Verma, a pronote for Rs. 3,300
was recovered from his person and that
that Shri Verma may take a plea that the loanee had
returned a part of the amount through the decoy.
These contentions were not raised by any one any
time prior to the report made by Shri Jamuar.
Shri Jamuar suggested that the - evidence should be
evaluated through a departmental enquiry first to
know all probable explanations of the accused before
he was sent for trial. Shri A. B. Choudhary agreed
with the comments or Shri Jamuar and endorsed the
recommendation that the case should be sent fur
departmental action first.

7.143 On September 9, 1976, Shri Sen, the
Director, agreed with Shri Choudhary's suggestions
and orders were issued to the Delhi Branch for taking.,
further necessary action.

7.144 A fresh attempt was made by she SP Delhi
Branch to retrieve the SP's reports from the Railways,
The Railway Authorities on receipt of the request in
writing handed over the SP's reports. Thereafter, a
fresh report was prepared recommending departmental .
action against Shri Verma and was sent to the Railway
Authorities.

7.145 The circumstances of the case and the
evidence given by Shri Sen leave little room for doubt
that someone from the Prime Minister's household
contacted Shri D. Sen and asked him to so arrange
that Shri Verma was not prosecuted. Accordingly,
contrary to the normal procedure, adopted in similar
cases, Shri D. Sen himself called for the papers,
attempted through his subordinates to retrieve reports
from the Railways and having failed to do so,
suggested a different line of action according to which
Shri Verma should be dealt with departmentally. The
evidence of Shri Mukherjee and the Vigilance Officer
of the Railways, in the light of the attempts made to
retrieve the report from the Railways leave little
room for doubt, that this was not a case in which,
according to the accepted procedure, departmental
inquiry should have been ordered. But it was
because of pressure from above that Shri Verma was
not prosecuted and various steps were taken.

Mr. D. Sen was given a notice under rule 5(2) (a)
of the Rules and served with a summons under section

-**m*?i>siaia£1SEKsS2!SSE52ttesEi " !'l i*A l ; .-^ii... :.,-/. Is.

8B of the Act. He submitted a statement and also
responded to the summons. His statement of defence
has been taken into account.

7.146 It is ..not- possible- to say as to who from
the Prime Minister's Secretariat or Household brought
pressure upon Shri D. Sen. and reminded him
subsequently. Shri D. Sen has' stated that he met
Shri Verma in the morning Durbar at the house of
the Prime Minister, Smt. Indira Gandhi, and that
Shri Verma made a representation. Shri D. Sen
further stated that because the representation was
made to him in the Prime Minister's house, he called
for the papers and reconsidered the matter. He
further stated that if he did not do so, he might have
been taken to task if the case had failed in a court
of law. Shri D. Sen has also stated in his defence
that he had not finally closed the prosecution of the
case. He had only suggested the testing of the
evidence in a Departmental inquiry and if the evidence
stood the test of the Departmental inquiry, the
authorities could always get back to the prosecution.
But oh the evidence it is clear that at the instance of
some one from the Prime Minister's house, Shri D.
Sen perverted the normal procedure and pressurised
his subordinate officers with a view to help Shri Verma
from being punished in a prosecution for an offence
under section 161' of the Indian Penal Code and
section 5(2). read with section 5(1) (d) of the
Prevention of Corruption Act. On the materials
collected by the authorities, there was little chance
of Shri Verma escaping conviction for the offence of
receiving a bribe.

-;.' .7.147 It is, therefore, a clear case in which ..
perversion of the normal process by Shri D. Sen and
misuse of power is established.

11. Deviation from established procedure, Misuse of
Power and Abuse of Authority by Shri T. R,
tuli, Chairman of the Punjab National Bank, in
allowing a dean overdraft to M/s. Associated
Journals Ltd.

7.148 On the 22nd of March, 1976, the Parliament
Street Branch of the Punjab National Bank permitted
a clean overdraft o'f Rs. 8,30,000 to M/s. Associated
Journals Limited, a company which carries on busi-
ness mainly as printers and publishers of newspapers,
The only short point for consideration in this case is
as.,to whether this transaction was a normal one in the
ordinary course of the Bank's business or whether it
was entered into because of collateral considerations.
Several facts have been placed before the Commission
and arguments advanced in relation thereto which are
totally irrelevant and extraneous to the consideration
of this basic point and it is not, therefore, necessary
to discuss them here.

7.149 Briefly, the undisputed facts are that earlv
in March 1976, Shri T. R. Tuli, the then Chairman

and Managing Director of Punjab National Bank met
Shri P. C. Sethi, the then Minister for Chemicals and
Fertilisers at the Minister's residence at the la'tter's

request. At this meeting Shri Tuli was asked by Shri
Sethi to help Associated Journals Limited by advanc-
ing money to them to enable- them t6 take delivery of
certain items of imported machinery which had
urrived at Bombay and on which Associated Journals
had to pay a considerable sum of money by way of
customs duty and demurrage charges. Thereafter,
Colonel Zaidi, the then Chairman and
Managing Director of Associated Journals Limited
and an Accountant of that Company met Shri T. R.
Tuli in Shri Tuli's office two or three times to explain
the requirements of Associated Journals and apparent-
ly also suggested that the sum of money to be imme-
diately advanced would be paid off from a term loan
of Rs. 15 [ak'hs to be advanced by the Bank to Asso-
ciated Journals against the security of the secoiid
mortgage of then building known as "Herald House"
on Bahadur Shah Zafar Marg, New Delhi. Accord-
ing to Shri Tuli's written statement dated October 22,
1977, after the discussions, in his office referred to
above, a formal request was made by Associated
Journals to the Parliament Street Branch of this Bank
on March 20, 1976, requesting for the grant of a
temporary overdraft of Rs. 10 lakhs. Shri Tuli has
also added that he had given his verbal approval to
Shri L. D. Adlakha, Manager, Parliament Street
Branch, in this regard. In the coarse o'f his exami-
nation before the Commission, Shri Tuli could not
state definitely when this verbal approval to the tran-
section was given but he indicated that it must have
been on the 18* or the l9th of March, 1976.

7.150 Associated Journals Limited did not have
an account in the Punjab National Bank till then
and they, therefore, opened a current account in the
Bank on the 20th and deposited a sum of Rs. 1,70,000
in that account. On March 22, a cheque for
Rs. 10 lakhs was issued by the Punjab National Bank
to enable Associated Journals to have adequate funds
to pay the customs duty and the demurrage required to
clear the machinery at Bombay. Thus, the entire
transaction resulted in a net overdraft of Rs. 8,30.000
in favour of Associated Journals Limited. Thereafter,
there was correspondence 1 between the Parliament
Street Branch of the Bank and tFie debtor company with
a view, on the part of the Bank, to ensuring that the
clean overdraft already permitted was properly secur-
ed. It is seen that on the 21st April, 1976, Associat-
ed Journals wrote to the Punjab National Bank to the
effect that due to some technical difficulties, they were
not in a position to offer the "Herald House" as secu-
rity and further that they were arranging to repay the
overdraft within a short period. It would appear that,
thereafter Associated Journals were making efforts to
raise the sums required to repay the clean overdraft
from the Punjab National Bank by offering "Herald
House" as a security by way of second mortgage tO'the
Syndicate Bank and that for some reason or the other,
they did not in fact succeed in raising the requsite funds
and in repaying the Punjab National Bank. It would
appeai- that upto now they have been able to repay
only a sum of Rs. 20,000 towards interest and that
well over a sum of Rs. 10 lakhs by way of principal
and interest is outstanding against Associated Journals.

in the books of the Punjab National Bank. The ques-
tions for consideration are whether —

(a) Mr. T. R. Tuli had himself taken the deci-
sion about allowing the clean overdraft, or
whether he had only approved a transaction
negotiated and entered into by the Branch
Manager of the Parliament Street Branch,
and

(b) If Shri Tuli had indeed permitted the over-
draft and had been responsible for the deci-
sion in this regard, whether he had taken the
minimum necessary precautions that a pru-
dent officer of the Bank should have taken,
in order to ensure the interests of the Ban!;.

In the course of his first testimony before the Com-
mission on November 17, 19/7, Shri Tuli was asked
Wfietner the loan was granted at his instance by the
Parliament Street Branch of his Bank, contrary to nor-
mal loan granting practice lonowed by the Bank, Shri
Tuli replied that there was a "reason" for doing so as
he had already stated in his written statement whicii
had just been read out } the reason being Associated
Journals Limited were in urgent need ot money and
further that ultimately they were to get a term loan
against the mortgage of a building. In response to a
further query as to whether he looked at the balance
sheet of the company, he replied "No Sir, not at that
time". When asked why he did not look at the
balance sheet, which was certainly his duty as a
Banker, he replied "that was my omission", When
further questioned as to why he insisted upon advanc-
ing this sum of money without any security, which r,e
was required to take immediately, he replied that it
was just by looking at the urgent requirements. When
asked whether his action was because a Minister had
advised him to help the company, he replied, "Yes Sir,
that is a big consideration for me". And added that
"naturally when a Minister says some consideration
has got to be given to that and that is why the whole
thing was expedited". The Commission reminded
Shri Tuli of a portion in his written statement wherein
he has stated that he had given his verbal approval to
Shri Adlakha and that since National Herald publish-
ed by Associated Journals was connected with the then
Prime Minister, it must have weighed a "little in his
mind to deal with the case on a priority basis expedi-
tiously". When Mr. Tuli was reminded that it was
without any security, Shri Tuli replied "of course it
was without security".

i 7.151 Shri Sethi basically confirmed Shri T. R. Tulvs
version of their meeting and the only important point
that he made was that according to him this request
was that Associated Journals should be helped "with-
in the frame-work o'f the rules". He also added that
at the relevant time he had also, become the Treasurer
of the Congress and that he would say that he acted in
this case in his capacity as a Congressman.

7.152 Shri Tuli has filed a voluminous statement
in response to the notice under Rule 5(2) (a) of the
Commissions of Inquiry Rules, 1972, and responded

to the summons u/s 8B of the Act issued to him in
this case. It is not necessary to go into the state-
ment in detail except to point out mat Shri Tuli has
sought to change the stand originally taken by him
in sis written statement dated October 22, 1977 and
his oral testimony. before the Commission on Novem-
ber 17,1977. Towards this objective, he has made
certain unwarranted observations about the Commis-
sion and its investigating officers which I propose to
ignore. The main thrust of the statement is that
Snn L. D. Adlakha, the then Manager of the Parlia-
ment Street Branch of the Bank had been associated
with the representatives of Associated Journals fuom
the earlier stage and that in fact that the transaction
had been negotiated and examined by Adlakha and
put up to Shri Tuli for approval and that Shri Tuli
had merely given his oral approval thereto.

7.153 Shri Tali's statement at this subsequent stage
that Shri Adlakha was associated in the earlier discus-
sions which he had with Col. Zaidi and other represen-
tatives of Associated Journals .Limited does not appear
to be correct as tnere is no mention about that in his
written statement dated October 22, 1977. Much
has b^en sought to be made out both in Shri Tuli's
statement dated January 9, 1978 and the argument
advanced by his Counsel that the entire correspon-
dence was with the Manager of the Parliament Street
Branch of Punjab National Bank and further that
even the internal communications in the Bank refer-
red to that Branch as the one which had negotiated
and entered into the transaction. In this connec-
tion reference was made to a letter dated March 20,

1976, in which Associated Journals Limited mention-
ed that they would be grateful if the Bank could
kindly sanction them temporary overdraft of Rs. 10
lakhs. ' This is the very letter which is referred to by
Shri Tuli in his written statement dated October 22,

1977, as the "formal request" after his discussions,
which he had had with Colonel Zaidi and the Accoun-
tant of Associated Journals Limited. It is further
seen that in another letter dated March 20, 1976,
addressed by Associated Journals to the Punjab
National Bank they had referred to the proposal as
"principally, agreed to by your Head Office authori-
ties". Similarly, in the Branch Manager's letter dated
April 8, 1976, to the Head Office, he had made it
quite clear that they had, "at the Company's request
and under the approval of our worthy Chairman" per-
mitted a clean overdraft of Rs. 8,30,000 on March 22,
1976. Shri Adlakha's statement in his affidavit
dated October 31, 1977, that Shri Tuli had directed
him to grant a clean overdraft of Rs. S,30,000 to
Associated Journals Limited has stood the test of
ci oss-examination by Shri Tuli's Counsel. Even in
his testimony before the Commission on January 17,
1978 in response to the summons under section 8B
oT the Commissions of Inquiry Act, 1952, Shri Tuli
has confirmed the fact that the recommendation made
by Shri Sethi and the request made by Col. Zaidi had
been taken into account in arriving at a decision in
this case, and that the cumulative effect of all these
factors had governed the approval of the loan. He
had also conceded that there were extra-commercial
considerations "to some extent".

'--■^^^i^lS^

7.15.4 On the basis of the evidence adduced, there
can be no doubt that the decision to allow a tempo-
rary overdraft in this case without any security ;
albeit on the understanding which did not materialise
that the security will be provided soon thereafter, was
solely that of Shri T. R. Tuli.

7.155 The. next question is as to whether he had
exercised the care and caution expected of a prudent
person entering into a transaction of this nature on
behalf of his employer. There were several circum-
tances in this case which should have put 'Shri Tuli
on- his guard:

(i) Associated Journals Limited did not have
an account with Punjab National Bank till
then, whereas at that time they had four
Bankers including Syndicate Bank, United
.Commercial Bank and Vijaya Bank Ltd.
There is nothing on record to show that
Shri Tuli either on his own or through any
of his officers made any confidential en-
quiry from the other Banks to ascertain (he
. credit-worthiness of the party. On the
other hand, the very fact that Associated
Journals Limited had to approach a Bank
with which they had no prior dealings ins-
tead of one of their 'four already existing
Bankers was adequate enough reason to
suspect that not . everything was well with
this proposal.

',..'/. (ii) The machinery in question had arrived m
Bombay towards the end of October 1975,
and demurrage was being accumulated' a!
the rate of Rs. 4,000 per day, it flavins
reached well over Rs. 6 lakhs by the time
the Punjab National Bank was approach-
ed. This also should have caused some
concern to Shri Tuli as no prudent busi-
nessman, unless he is in absolute distress
and unable to raise -any funds, would allow
demurrage of this magnitude to add to tH_ s
cost of -his capital equipment.

' (Hi) Tn the course' of his testimony, Shri Tuli
has confirmed that he had not at the rele-
vant time seen the balance sheet of the com-
pany or assessed its financial soundness. In
fact, Shri Tuli has admitted that no evalua-
tion report regarding Associated Journals,
nor their balance sheet, nor any statement
of their assets and liabilities had been seen
by him, before he. approved this proposal.
Tt is also seen .from a report of the Central
Intelligence Section of the Credit Adminis-
tration of the Punjab National Bank that
Associated Journals Limited had incurred
heavy losses of about Rs. 10 lakhs per
year in 1973-74, and 1974-75. that then-
accumulated losses stood at Rs. 47.46 lakhs
against paid up capital of Rs. 51.64 lakhs
and some tied up reserves of Rs. 6.77 lakhs.

Thus, according to the report, not only the
whole of the reserves and surpluses stood
wiped off but the. paid up capital to the
extent of Rs. 40.69 lakhs also stood erod-
ed. The Company also had substantial
liabilities both secured and unsecured.
These are matters which would have be-
come clear even on the basis of a cursory
examination of the company's last balance
sheet and subsequent statements or books
of accounts. It is clear that no such exa-
mination was made or directed to be made
by Shri Tuli before he took the decision in
this case.

7.156 Shri Dang appearing on behalf of. Shri Tuli
strenuously urged that to his knowledge the Associat-
ed Journals did own a building in -Delhi known as
'Herald House' which was of considerable value and
that the ownership of this building considerably in-
fluenced Shri Tuli in granting a clean overdraft with-
out insisting upon any security. It appears that Asso-
ciated Journals did own the 'Herald House'. There
is no clear evidence before the Commission as to the
market value of the building at the date when the
transaction took place nor about the encumbrances if
any outstanding thereon and the other liabilities out-
standing on the date of the transaction. Whether the
bank may ultimately have been able to recover the
whole or part of the amount advanced by way of a
clean overdraft amount after litigation or otherwise
is not relevant for the purpose of this enquiry. The
building, it appears was valued at cost and deprecia-
tion was deducted. The balance sheet did not dis-
close any ostensible assets out of which the amounts
advanced could be recovered. The bank advancing
funds on a clean overdraft would normally try to
ascertain the credit-worthiness of the borrower and
try to ensure whether the amount advanced would be
repaid by the borrower on dema'nd. This would be
the minimum precaution which a banker could take
before advancing even a small amount by way of
clean overdraft. In the present case, however, no
precautions which would be normal in advancing
money on clean .''ioveidraft account were taken ; but
solely because of the intervention of the Minister
Shri P. C. Sethi loan was advanced, disregarding toe
cannons which would ordinarily govern the advancing
of such a loan.

7.157 For these reasons, the Commission is firmly
of the view that Shri Tuli who had permitted the over-
draft and was responsible for the decision in this re-
gard had taken it without making the minimum neces-
sary examination of the facts of the case and without
exercising a modicum of care or caution and that this
conduct on his part is attributable to the fact that, he
was swayed by collateral considerations. Thus, this
transaction was not a normal one in the ordinary
course of the Bank's business. The Commission is
of the view that Shri Tuli had subverted established
procedure in permitting this overdraft without secu-
rity to M/s. Associated Journals Limited. He has
also misused his powers and abused his authority ill
so doing.

12. Deviation from established procedure in sanction-
ing facility by way I of opening of three foreign
Letters of Credit by the Punjab National Bank
in favour of MJs. KRSMA Chemicals Private
Limited.

7.158 On the 28th of September, 1976, the Parlia-
ment Street Branch of the Punjab National Bank esta-
blished three foreign letters of credit aggregating to
Rs. 9,30,000 without margin on behalf of M/s.
KRSMA Chemicals Private Limited (hereinafter re-
ferred to as the Company), for the import of certain
chemicals. It would appear that Shri S. P. Mehta,
since deceased, one of the Directors of the Company,
approached Shri T. R. Tuli, the then Chairman and
Managing Director of the Bank, through the good
offices of one Shri Virender Kumar who was at the
relevant time an Additional Private Secretary to Shri
P. K. Mukherjee, the then Minister for Revenue and
Banking. According to Shri Tuli, Shri Kumar intro-
duced Shri S. P. Mchta as the father-in-law of Shri Sat
Mehta, who was a brother of Shri Om Mehta, the
then Minister of State for Home Affairs. Incidental-
ly, Shri Sat Mehta was one of the major shareholders
of this Company at the relevant time, holding nearly
fifty per cent of the shares.

7.159 In his statement dated November 14, 1977
Shri Tuli has added that :

"Shri Kumar further requested me to get three
Foreign Letters of Credit opened without
,,,■<;?'; any margin on behalf of KRSMA Chemi-
cals Pvt. Ltd. as the Company was holding
import licence. Since the party was relat-
ed to Shri Om Mehta and was brought by
Shri Kumar, I asked the Regional Manager
Shri D, P. Nayyar, who incidentally happen-
ed to be at the Head Office, to get the need-
ful done expeditiously.

"I had no occasion to assess the financial sound-
ness of the Company or its Directors except
that the Directors were highly connected
and as per Shri Kumar, they were very well
experienced in the line."

7.160 Thereupon Shri D. P. Nayyar took Shri S. P.
Mehta and his companion to Shri K. N. Vali, Branch
Manager of the Parliament Street Branch of the Bank,
and informed Shri Vali that Shri Tuli had instructed
him to take Shri Mehta and his companion to Shri Vali
and asked him to open three foreign letters of credit
without any margin on behalf of KRSMA Chemicals
P,vt. Ltd. At this stage, Shri S. P. Mehta handed over
to Shri Vali a letter "from the Company dated Septem-
ber 28, 1976 which, inter alia, stated that "as already
sanctioned by your Chairman we are enclosing here-
with three applications for opening letters of credit
by cable without margin". According to Shri Vali,
the letter along with the oral instructions of the
Chairman conveyed through Shri D. P. Nayyar consti-
tuted approval of the Head Office for the proposed
transaction. Shri S. S. Jolly, Manager of the Foreign
Exchange Department of the same Branch, who hap-
pened to be present in Shri Vali's room at the relevant
time, has added that Shri Nayyar had also instructed

him to ensure that no inconvenience was caused to
Shri S. P. Mehta and that the work was done
expeditiously.

7.161 The documents covering the imported goods
arrived in December 1976. The Company cleared one .
of these for a sum of about Rs. 1,60,000 but failed to
clear the other two documents totalling about
Rs. 7,70,000. The Company pleaded inability to
retire them in view of the tight credit squeeze and
came forward with various proposals which they failed
to implement. The Bank was thus left with no option
but to take delivery of the goods to avoid further
demurrage etc. The total cost to the Bank including
customs duty and demurrage in respect of these two
documents amounted to Rs. 9.15 lakhs and according
to Shri Vali's statement, the Bank is likely to incur a
loss of Rs. 4.5 lakhs on the transaction after taking
into account the prevailing prices of these chemicals
in the market. It would appear that the chemicals
were imported under an Actual Users Licence and that
the condition that goes with such a licence, namely,
that it can be sold only to an actual user would restrict
its marketability.

7.162 The short point for consideration in this
case is whether Shri Tuli's decision to enter into this
transaction expeditiously and his directions in this
regard to the concerned officers was influenced solely
by his commercial judgment in relation to it or whether
it was in any way influenced by collateral
considerations.

7.163 That Shri Tuli had taken the decision in this
regard on his own has not been disputed by him, even
in the statement dated January 13, 1978, filed by him
in response to the Notice under Rule 5(2)(a) of the
Commissions of Inquiry (Central) Rules, 1972. Shri
Tub has, however, sought to furnish certain reasons
for arriving at this decision and has also made an
attempt to blame some officers for certain alleged
procedural irregularities: There is no need to consider
such alleged irregularities, if they relate to events
subsequent to the date of the opening of the letters of
credit because' the vital point for consideration is to
examine whether normal established conventions or
procedure had been followed before entering into the
transaction or in case they had not been followed, the
reasons for such departure from established conventions
and procedure.

7.164 In his written statement dated November A,
1977 Shri K. N. Vali has stated that the normal proce-
dure followed by the Punjab National Bank in the case
of any prospective borrower is to take the loan applica-
tion in the prescribed form accompanied by a statement
of assets and liabilities and previous experience on the
basis of which the proposal is appraised by the Branch
after ascertaining the credit-worthiness of the borrower
and the viability of the proposal. He has added that
unless the Bank is satisfied about the credit-worthiness
of the borrower and the viability of the project no
foreign letter of credit is opened without any margin.
According to him, all this procedure would take a
period of two to three weeks to get the proposal com-
piled, processed and sanctioned by higher authorities
In the course of his oral testimony on November' 17,
1977, Shri Vali has stated that he did not make any

■ ■"■■:.. V'.-i -".".".";j; ■!:".! ■ '..■Ai'-.y,. ..

pre-assessment of the proposal because he was under
instructions of his higher authorities. He has added
further that the clear instruction that the letters of
credit were 'to be established "without margin" meant
that the pre-assessment required had been made by
such higher authorities and that they knew about the
party well enough to give such directions. In fact,
Shii Vali's assessment of the financial soundness of
the Company was made after the event and his com-
ments in relation thereto could not but have been
influenced by the fact that the transaction had already
been made and had, therefore, to be justified. Nor
could he have ignored the fact that the Company had
been strongly recommended to him by no less a person
than his own Chairman and Managing Director,

7.165 In the course of his submissions, Shri Tuli's
Counsel referred to a letter dated 16th September,
1976 addressed by the Company to the Chairman
of the Punjab National Bank. The original of the
letter was produced at the time of hearing and a photo-
stat copy thereof has been taken on record. It was
seen from an endorsement on the letter that it was
received in the Parliament Street Branch of the Bank
only at 3 p.m. on the 27th of September, 1976. .In
this letter the Company had ' requested the Chairman
to issue instructions to the Greater KaUash Branch of
the Bank with whom the Company had already opened
an account, to issue the letter of credit without margin
by cable. In the course of his testimony in response
to the summons u/s 8B of the Commissions of Inquiry
Act, 1952, Shri tuli has stated that he had never seen
this letter and that it never came to him. It Was Shri
Tuli's contention that the letter may have been received
by his personal staff and forwarded by them to the
concerned Branch. There can be no doubt that in
the normal course, a letter addressed to the Chairman
of the Punjab National Bank, would have been received
by him or his personal staff on his behalf. .In this
case, if the personal staff, had forwarded the letter to
the concerned Branch, it should be presumed that
they would have sent it to the Branch referred to
th erein , n aniely , the Greater Ka ilash B ranch . There is ■-,
also no satisfactory explanation for the gap of about
eleven days between tiie date of the letter and the date
oh which if was received by the Parliament Street
Branch of the Bank which is in the same building as
the Head Office. The Commission is, therefore, of the
view that this letter was, in fact, received by Shri Tuii
and was with him for some time until he took a decision
in relation thereto on or around 27th September, 1976,
when he had it forwarded to the Branch to which he
subsequently directed the representatives .of the
Company.

7.166 In his writen statement dated January 13,
1,978 referred to above, Shri Tuli has stated that on
his further questioning, Shri S. P. Mehta had mentioned
to him that the raw materials covered by the import
licences were being imported by him as an actual
user and that their market value was much higher
than their imported value. There is no mention of
this conversation with Shri S. P. Mehta either m i Shri
Tuli's written statement dated November 14, 1977 or
in his oral testimony before the Commission on Novem-
ber 17, 1977. On the other hand, he has pointed out
that he had no occasion to assess the financial sound-
ness of the Company or its Directors except that the

SB9 HA 777— 11

Directors were highly connected and according to the
person who introduced him to them, they were well
experienced in the line. If the soundness of the pro-
posal as distinct from the financial soundness of the
party had been arrived at that stage by Shri Tuli, it is
most unlikely that he would have failed to mention it
at the earlier stages. In fact, in his oral testimony
before the Commission on November 17, 1977, Shri
Tuii has stated that because of the fact that certain
relatives of a Minister of State were concerned, the
matter was expedited and immediate action taken.
Herein lies the deviation from normal established proce-
dures. Normal established procedures in a case of
this type would have required the completion of various
formalities and considerable pre-assessment of the
Party's credit-worthiness and viability of the proposal.
These requirements were dispensed with because of the
urgency and the Chairman's direction to act
immediately.

7.167 Under the circumstances, this is a clear
instance where the Chairman and Managing Director
of the Punjab National Bank, Mr. Tuli, took a decision
and gave directions for its implementation contrary to
the normal established procedures in such cases.

13, Concessions by Punjab National Bank in favour

of Maruti Limited.

7.168 In 1971, Maruti Ltd., a Company incorpo-
rated under the Companies Act, 1956 had applied to
the Punjab National Bank for certain Cash credit and
other facilities. From early 1972, the Bank allowed
certain facilities and by the time Shri T, R. Tuli took
over as Chairman and Managing Director Of the Bank
in August 1975, the Company already enjoyed a total
facility of Rs. 90 lakhs from the Bank subject to
certain stipulations. Cash credit accounts of the Com-
pany with the Bank started becoming irregular from
1974 onwards, and the Bank had been asking them
from time to time to regularise the accounts. The
Bank had also started charging, in accordance with its

■normal practice,- penal interest on the accounts to the
extent to which they Were in exteess of the allowed
limits.

7.169 After protracted correspondence, Maruti Ltd.,
'wrote to the Punjab National Bank in September 1976
stating that they had incurred heavy losses and request-
ed the Bank to waive the penal interest and also to
reduce the rate of interest to the maximum extent
possible. In their turn, the Company agreed to regula-
rise the accounts by making a lump sum payment of
Rs. 5 lakhs and monthly remittances of the order of
Rs. 1 lakh. The then Assistant General Manager
(Credit) of the Bank considered these proposals and
recommended to the Board that penal interest of a
little over Rs. 67,000 already charged in the accounts
may be refunded and that it may be waived for the
future. He also recommended that the rate of interest
may be reduced from 15i% to 14% per annum. This
recommendation was endorsed by his superior officers
and was approved by the Board at its meeting held on
October 6, 1976.

7.170 As the Company failed to keep up its commit-
ment regarding recurring payments for and from

April 1977, the refund of pencil interest allowed was
cancelled and the facility of concessional interest also
stood withdrawn.

7.171 On the basis of these facts, the question that
arises for consideration is whether Shri T. R. Tub, the
then Chairman and Managing Director of Punjab
National Bank acted rightly in accepting and recom-
mending the proposals for waiving of penal interest
and for reducing the fate of interest charged to the
party, or whether he should have resorted to legal
proceedings with a view to recovering the Bank's out-
standings. Shri T. R. Tuli has filed a statement m
response to the Notice under Rule 5(2) (a) oE the
Commissions of Inquiry (Central) Rules, 1972, and
has also appeared in response to the summons u/s
SB of the Commissions of Inquiry Act, 1952.

7.172 When any Bank is faced with what is gene-
rally referred to as a 'sticky account', it can either
nurse it back to health, inter alia, by making con-
cessions in the matter of interest, schedule of payments,
etc., or start legal proceedings on the basis of the
security on the basis of which advance would have been
made. Often it is seen that Bank's interests are best
served by adopting the first course of action as the
latter can land the Bank in needless litigation and
-would be resorted to only if all ether efforts fail. It
is, therefore, essentially a question of judgment.

7.173. In view of "this and taking into account the
evidence adduced and the arguments advanced, the
Commission is of the view that no subversion of admi-
nistrative procedures or misuse of power or abuse of
authority has' been established in this case.

14. Deviation from the established procedure and
irregularities in the reconsiUution of the Boards
of Air India and Indian Airlines Corporations.

7.174 The terms of the Boards of Air India and
Indian Airlines Corporation expired on August 31,
1976. Files relating to reconstitution of the two Boards
were submitted to the then Minister for Tourism and
Civil Aviation, Shri Raj Bahadur. He directed that
for the time being, the two Boards should be kept
functioning, and the Ministry should recommend to
the approval of the Appointments Committee of the
names for each Board, as suggested by him, and leave
the remaining members to be nominated later.

7.175 Shri N. K. Mufcirji, Secretary in the Ministry,
accordingly, sent a proposal to the Establishment Offi-

s cer on January 7, 1976, requesting him to obtain
the approval of the Appointments Committee of the
Cabinet and for a long time no final decision was
conveyed to the Ministry in spite of several reminders.
On February 9, 1976, Shri N. S. Bhatnagar, the then
.Special Assistant in the Ministry of Tourism and Civil
Aviation received a telephonic message from the Addi-
tional Private Secretary ito the Prime Minister (Shri
R. K. Dhawan) suggesting to Shri Bhatnagar that
certain names should be recommended to the Appoint-
ments Committee of the Cabinet as Members of the
.Boards of Directors of the two Corporations. Shri
Dhawan informed Shri N. S. Bhatnasar that those

names had been suggested by the then Prime Minister
Smt. Indira Gandhi and further stated that Shri
Bhatnasar should not mention those names to the
Secretary of the Ministry, Shri N. K. Mukarji. At that
time the Minister was away-on tour and Shri Dhawan
advised that Shri Bhatnagar should send the proposal
under his own signatures. Shri Bhatnagar declined to
do so saying that he was incompetent to cany out the
suggestion and that recommendation of the names
should await the Minister's return. Shri Dhawan felt
annoyed at what Shri Bhatnagar said. Shri Raj
Bahadur returned to Headquarters the same evening
and was apprised of the conversation by Shri
Bhatnagar, which he had with Shri Dhawan. Shri
Bhatnagar also furnished to Shri Raj Bahadur the list
of names which had been dictated to him by Shri
Dhawan on telephone.

7.176 Shri Raj Bahadur, accordingly, sent a fresh

proposal for reconstitution of the two Boards directly

to the Prime Minister on February 10, 1976, under

his own signature. This fresh proposal contained all

the names which were dictated by Shri R. K. Dhawan

to Shri Bhatnagar on telephone. The approval of the

Prime Minister to the fresh proposal was received the

same evening i.e. on February 10, 1976. The names

which were dictated to Shri Bhatnagar and included

in the proposal of Shri Raj Bahadur were ultimately

approved by the then Prime Minister on February 10,

1976, resulting in certain changes. Shri Raj Bahadur's

proposal contained the names of Capt. A. M. Eapoor,

Regional Director, Calcutta, who was, junior to Shri

V, Satyamurthy, who was then the Deputy Managing

Director, for appointment as Director of the Indian

Airlines Corporation. The names, which were dropped

from the earlier proposal submitted by the Ministry

were Shri S. Y. Ranade, and Shri K. G. Appuswaniy

from the Air India and Shri S. Y. Ranade and Shri

V, Satyamurthy from th? Indian Airlines Board.

7.177 Air Chief Marshal P. C. Lai, who was the
Chairman arid Managing Director of the Indian Air-
lines, was dissatisfied with the omission of the name
oE Shri V. Satyamurthy. He made a representation
to the Minister Shri Raj Bahadur. He also submitted
a representation to the Prime Minister in this behalf
and ultimately submitted his resignation because his
suggestion for reconsideration was not accepted.

7.178 For appointments of the non-official Members
of the two Boards the Ministry did not seek the advice
of the P.E.S.B. Also the Ministry did not consult the
Chairman of the two Boards before finalisation of the
proposals. The proposal for a reconstitution of the
two Boards was not sent to the Establishment Officer,
which is the normal procedure for seeking approval of
Appointments Committee of the Cabinet, and the pro-
posals were sent by the Minister directly to the Prime
Minister and her approval was obtained before the
Establishment Officer was requested to obtain the for-
mal approval of the Appointments Committee. This
was _ done without consulting the Secretary of the
Ministry. The Department of Personnel and Adminis-
trative Reforms were not even aware of the develop-
ments of the case and though the proposal was sent
by Shri Raj Bahadur and had been approved by the
Prime Minister on February 10, 1976, the Joint

...Z'^-'-i, ...-.■„_ ^ jili..-'.:* I.-: j .

, . •

_J*tA,j . ' ^^ii&iJStSiii;

Secretary, Department of Personnel and Administrative
Reforms informed the Secretary, Ministry of Tourism
and Civil Aviation through a D.O. letter dated Feb-
ruary 9/11, 1976, that it was understood from the
Prime Minister's Secretariat that the Minister of Tour-
ism and Civil Aviation was reconsidering the proposals
for the reconstitution of the Boards; and, therefore, no
action was being taken On the Secretary's communi-
cation dated January 7, 1976.

7.179 The approval of the names of the Directors
were notified on February 13, 1976. On the same
day the Establishment Officer was requested to obtain
formal approval of the Appointments Committee of
the Cabinet, which was communicated by the Estab-
lishment Officer on February .27, 1976.

7.180 It appears from the evidence of Shri Raj
Bahadur that he was not a free agent in the matter
of making recommendations. He had submitted his
recommendations on January 7, 1976. During his
absence his Special Assistant was directed to submit
a fresh list omitting certain names and adding certain
other names. Shri R. K. Dhawan, Additional Private
Secretary to the Prime Minister suggested that without
reference to -the- -Secretary- to the Ministry, under his
own signatures Shri Bhatnagar may send the list to
the then Prime Minister, but- Shri Bhatnagar declined
to do so. When the Minister returned, he carried out
the suggestions which were made. Apparently, there
was nothing against Shri V. Satyamurthy, who was
dropped from the list of Directors. In protest against
the dropping of Shri V. Satyamurthy from the list, the
Chairman of the Indian Airlines Board, Air Chief
Marshal P. C. Lai finding that he was unable to secure
any reconsideration for Shri V, Satyamurthy and that
even his representations made to the Prime Minister
had not been considered, submitted his resignation.

7.181 It appears that, Air Chief Marshal P. C. Lai
was subjected to police surveillance till he. left his office.

7.1.82 Smt. Gandhi was sewed with a notice under
rule 5(2) (a) of the Commissions of Inquiry Rules
and summons under section SB of the Commissions of
Inquiry Act in connection with this case. She did
not file any statement and when she appeared before
the. Commission, she refused to make any statement
On oath. Under the circumstances, therefore, the
Commission has no alternative but to draw an adverse
inference against her in view of the circumstances and
in the light of the evidence available on the record.

7.183 In this case, it appears that the normal or
established procedure in regard to the appointment
pf the Board of Directors was not followed and Minis-
ter Shri Raj Bahadur was practically compelled to fall
in line with the suggestions made by the then Prime
Minister, Smt. Gandhi, and it was only after the sugges-
tion made by her was carried out that the lists sub-
mitted were approved.

7.184 In this case, as in many other cases, the
instructions issued from the Prime Minister's office:
were oral and given by th& Additional Private Secretary

to the Prime Minister. Though pursuant to these
instructions Shri Bhatnagar himself failed to act, as

desired by Shri Dhawan, the Minister complied with.
these instructions on the lines suggested by Shri
Dhawan.

7.185 The role of oral instructions in the transac-
tions of business of the Government needs to be de-
fined and definite guidelines set down. To the Com-
mission this seems imperative, not only in the interest
of healthy administration, but also to protect the junior
functionaries acting on the oral instructions of the
seniors from the consequences of subsequent denials
by the seniors when things go wrong.

15, Decision process leading to the purchase of three
Boeing 737 aircraft by Indian Airlines.

7.186 A special group was constituted to study the
proposal for augmentation of capacity in the Indian
Airlines in May, 1976. The group was to study the
various aspects dealing with operational capabilities,
financial terms and economics of the aircraft available
in the market and recommend the most suitable air-
craft fleet composition and programme of induction
extending over the period from October, 1976 to
March, 1979. This Committee dealt with the various
technical details, airport constraints and financial eva-
luation of the various types of aircraft. While certain
of the aircraft, such as, F-27 and BAC-111 were
subjected to proving flights on Indian Airlines selected
routes to study their operational performance figures,
Boeing 737 was considered on the basis of technical
data supplied by the manufacturer but without any
route testing. The report of this Committee was plac-
ed before the Indian Airlines Board at its meeting
held On August 16, 1976, and it was decided that an
Interline Committee consisting of the Joint Secretary
(Finance), Ministry of Tourism and Civil Aviation
and' the Managing Directors of Air India and Indian
Airlines should study these proposals.

7.187 The Interline Committee had not finalised
its views. yet when on October 29, 1976, morning
Shri P. N. Dhar, Secretary to the Prime Minister spoke
to Shri N. K. Mukarji, Secretary, Civil Aviation, on
phone. Shri N. K. Mukarji in his affidavit given to
the Commission has stated that Shri P. N.. Dhar had
conveyed to him that it was the Prime Minister's
impression that the Ministry of Tourism and Civil
Aviation was obstructing the purchase of Boeing 737
aircraft by Indian Airlines, Shri Mukarji wrote back
to the Secretary to the Prime Minister the same day
indicating that there was no proposal about the pur-
chase of aircraft by Indian Airlines pending ;with the
Ministry. However, the Board of Directors of Indian
Airlines had considered the matter and had referred
it to an Interline Committee for detailed examination
on August 16, 1976, which was yet to finalise its
views. Shri Mukarji also informed Shri P. N. Dhar
that the Minister had taken a meeting that morning at ■
which it was decided to extend the deadline of the
Boeings offer from the end of October, 1976 to
December 31, 1976.

7.188 On the same day: i.e. on October. 29, 1976,
Shri N. K. Mukarji, .Secretary, Civil Aviation and
Tourism was sent 'for by Shri Raj Bahadur, the then

Minister of Civil Aviation, to Attend a meeting, at
which were present already Shri A. H. Mehta, Acting
Chairman of Indian Airlines and Shri Kirpal Chand,
Director (Finance) of Indian Airlines.

7.189 While tire meeting was on, Shri Dhawanrang
up Shri Raj Bahadur and Shri Raj Bahadur was licard
to say:

"Yes, Dhawan Sahib, I am going into the matter
with my officers, who are with me."

7.190 At this meeting Shri A. H, Mehta suggested
that a letter of intent should be placed on the Boeing
Company before their latest ollet expired on Novem-
ber 1, 1976. Pending the receipt of the recommenda-
tions of the Interline Committee and final decision by
the Indian Airlines Board, the Indian Airlines Manage-
ment sent a letter on October 30, 1976 requesting for
permission to issue a letter of intent to the Boeing
Company in respect of purchase of three Boeing 737
aircraft. This letter was actually handed over to the
Secretary at a Meeting held on October 30, 1976, and
after discussion it was agreed that the requisite letter
of intent could be issued subject to the condition that
it did not involve any pommitment for purchase of
aircraft. However, it was also decided that the other
manufacturers may also be approached and, if neces-
sary, similar letters of intent may also be issued to
them.

7.191 A meeting appears to have taken place in the
second or third week of September, 1976, in the ofhee
of Shri A. H. Mehta, at which were present Shri
Kirpal Chand, Director, Indian Airlines, Capt. A. M.
Kapoor, Director of Operations and Shri Rajiv Gandhi
son of Smt. Indira Gandhi. There are conflicting
versions as to how Shri Rajiv Gandhi happened to be
there in that meeting. Shri A. H. Mehta has stated
that Capt. Kapoor had rung him up and asked him
whether he could come along and discuss certain tech-
nical and maintenance problems along with an Avro
Commander and Shri Mehta agreed to meet him;
but when Capt. Kapoor came in, the Commander, who
had accompanied him, happened to be Capt- Rajiv
Gandhi. Shri Kapoor has, however, stated that Shri
Rajiv Gandhi was already with Shri A. H. Mehta when
Shri Kapoor came into the room of Shri A. H. Mehta,
Shri Kapoor also stated that at this meeting Shri Kirpal
Chand, Director (Finance) , Indian Airlines had shown
Shri Rajiv Gandhi the Financial projections. Accord-
ing to Shri Kirpal Chand he showed the financial pro-
jections to Shri Rajiv Gandhi at the instance of the

.Chairman, Shri A. H. Mehta. According to Shri
Mehta's statement he did not remember having given
any such directions to the Finance. Director to show
the financial projections to Shri Rajiv Gandhi. At this
meeting, according to Shri Mehta, Capt. Kapoor is
reported to have said that he did not understand why
there was so much delay in the progress of the case
dealing with the purchase of the Boeing aircraft, which,
according to Shri Kapur, were operationally and tech-
nically superior.

7.192 The Interline Committee made their
recommendations on November 3, 1976, recommending
the purchase of Boeing 737 aircraft. Shri Badal Roy,

who was Joint Secretary (Finance) in the Ministry of
Tourism and Civil Aviation and who was a member of
the Interline Committee, had, however, observed :

"Indian Airlines should adopt a total systems
approach rather than an ad hoc interim
solution, which might adversely ulluct Die
optimum long term solution, perhaps at heavy
cost."

7.193 The Indian Airlines proposal for the purchase
of three Boeing 737 aircraft was sent to the Ministry
on November 20, 1976. The Airlines Board at its
meeting held on November 24, 1976, approved the
action of the Management in seeking Government's
approval for purchase of the aircraft. Shri O. P. Mehra,
Rt. Air Chief, however, opposed it on the ground that
it was not based on any system study.

7.194 The proposal was received in the Planning
Commission on November 26, 1976. The Planning
Commission felt that "there was sufficient reason for
believing that the acquisition of B-737 may not be
appropriate and that a decision should not be taken
without the completion of a system study".

7.195 Shri Nite'n Desai, Consultant in the Project
Appraisal Division of the Planning Commission, who
was examined by the Commission, stated that the sys-
tem study could have been completed in about two
months. Shri Desai had asked for a system study report
to be obtained at the meeting which he had attended in
the room of the Secretary Aviation, Shri N. K. Mukarji
on October 30, 1976. Apparently, the Indian Airlines
had not taken any steps pursuant to this suggestion "of
Shri Desai.

7.196 The matter was referred to the Public Invest-
ment Board, which considered the proposal at its
meeting held on January 10, 1977, and January 13,
1977, The following important decisions were taken
by the P.I.B :—

(i) A system study be undertaken and completed
by the Indian Airlines by the end of
February, 1977 ;

(ii) If on the basis of an integrated study, it
transpired that a new proposal involving a
larger order of new aircraft emerged, the
advantage of bulk purchase could be
obtained;

(iii) Indian Airlines could approach the manufac-
turers to hold both their price and delivery
schedules using the leverage of possibly a
large order.

7.197 According to Shri Kirpal Chaiid, they were
all "upset at the decision of the P.I.B. to defer the
augmentation of capacity pending completion of the
Total System study". Shri Kirpal Chand said that after
the meeting when they all went to the office of 'the
Chairman, Shri A. H. Mehta, Shri Mehta remarked that
"you technocrats have not been able to get the aircraft
for me. Now I will get them for you". Shri Mehta has
stated that immediately on his return from the P.I.B.

;.:.- ';.'_',-^r: .,■.■■- .;;;■■'.:-.-■; '-".-

^^ : ^Jt^m^^^^^^y:^^^^-^'^^^^^^^^^

meeting, he got a phone call from the Minister for
Tourism and Civil Aviation, Shri K. Raghuramaiah,
who was "visibly annoyed over the postponement of the
decision to purchase trie Boeing atrcralt". Shri Mehta
does not corroborate what Shri Kirpal Chand ha$ said
regarding the. technocrats not being able to get the air-
craft, etc. He, however, admits that there was dis-
cussion between him, Shri Kirpal Chand and others ;
when he had said that the technical department had not
been able to satisfy the Planning Commission.

7.198 Ever since Shri Raghuramaiah took over as
Minister for Civil Aviation and Tourism on December
24, 1976, he was anxious that the case relating to the
purchase of aircraft by the Indian Airlines should be
processed urgently. He had spoken to the Secretary
Shri N. K. Mukarji on more than one occasion. Shri
Raghuramaiah has also stated that shortly after he took
charge of the Ministry, during one of his visits to the
Prime Minister's house in connection with some Parlia-
mentary affairs matters, Shri Dhawan had told him that
the Boeing purchase case was pending and was being
delayed in his Ministry. Shri Dhawan wanted him to
look into it. Shri Raghuramaiah took Shri Dhawan's
reference to this subject as an order emanating from
the Prime Minister. In support of this Shri Raghura-
maiah said that as the Minister Incharge of Parliamen-
tary ASairs, he had obtained the resignations of Shri
Uraa Shankar Dikshit, Shri Swaran Singh and Shri
Raj Bahadur and a number of other Ministers, just
because Shri Dhawan told him to do so. He took
what Shri Dhawan had said as coming from the Prime
Minister herself.

7.199 Shri N. K. Mukarji, Secretary, Aviation had
advised the Minister that the recommendations of the
P.I.B. should be accepted with regard to the system
study, etc. However, the Minister overruled the Secre-
tary's advice and directed that the matter be immedia-
tely referred to the Cabinet recommending purchase of
three BOeing-737 aircraft.

7.200 Oa February 8, 1977, the Minister called
Shri Kirpal Chand and told him that the proposal had
been finally cleared by the Cabinet. The Minister also
instructed Shri A, S. Bhatnagar, Joint Secretary, Avia-
tion, to ensure that the formal approval was communi-
cated to the Corporation the same day and the contract
was signed immediately. The Ministry's sanction for
purchase of three Boeing-737 aircrafts at a total project
cost of Rs. 30.55 crores was issued to the Indian Air-
lines the same day i.e. February 8, 1977 ; and was
delivered to Shri Kirpal Chand by hand on the same
day. In the sanction it was mentioned, inter alia, that
the Indian Airlines should further negotiate with the
Sellers and try to obtain the best possible terms for the
three aircraft. According to Shri C. L. Dhingra,
Deputy Secretary, Civil Aviation, the Intention, was to
associate Joint Secretary (Finance) in the Ministry
with the negotiating .team.- Even- before the Ministry
could inform Indian Airlines that the Joint Secretary
(Finance) would be the representative on the negotiat-
ing team, the Indian Airlines informed the Ministry
that they had signed the contract with the company
on February 9, 1977 ; i.e. a day after the issue of the
sanction and had obtained a further discount of

$ 15,000 per aircraft. The Joint Secretary (Finance)
was, thus, not associated with the negotiations with the
Boeing Company.

7.201 Shri Raghuramaiah has stated that after the
Cabinet meeting was over on February' 5, 1977, at
which the decision to purchase the Boeing aircraft was
taken, the Prime Minister had told him about a report '
that had appeared in a Wall Street Journal about some
deal with tne Boeing Company. She had asked him to
wait before the purchase order was placed ; and three
days therefater she told him to "Go ahead. Place the
order". Immediately after that he told his officers to
sign the contract.

7.202 It would thus be apparent that the manner in
which this deal was pushed through suffers from several

infirmities :

(i) Even before the Interline Committee, which
was constituted by the Indian Airlines Board
to study the proposal in depth and the com-
parative merits of the available aircraft, had
submitted its report, the Indian Airlines
Management sent a letter to the Ministry for
permission to issue a letter of intent to the
Boeing Company.

(ii) The Indian Airlines -submitted its proposal for

purchase of the aircraft to the Ministry on
November 20, 1976, and it was only later on
November 24, 1976 that the Indian Airlines
Board approved the action of the Manage-
ment seeking the Government's approval for
purchase of the aircraft.

(iii) The Planning Commission's representatives
had desired at the meeting held on October,
1976, that a system study should be under-
taken by the Indian Airlines, which was
capable of being completed within two
months. But no steps were taken to complete
this study.

(iv) The P.I.B. categorically opposed the proposal
pending the completion of the system study.
The Secretary's recommendations to abide
by the P.I.B.'s recommendations were turned
down by the Minister, Shri Raghuramaiah ;
apparently because he had been asked by

t ■ Mr. Dhawan to look into the matter urgently
and Shri Raghuramaiah took the suggestion
of Shri Dhawan as emanating from the Prime
Minister.

(v) According to the Finance Ministry, there was
no instance of an Administrative Ministry
going ahead with the proposal to the Cabinet
for a decision against the recommendations
of the P.I.B. This was done in this case.

(vi) The decision to sign the contract was given
on February 8, 1977. On February 9, 1977
the contract was signed. Actually, the deli-
very schedule limit given by the Boeing com-
pany had expired on February 7.

(vii) The visit of Shri Rajiv Gandhi to the office
oi *the Chairman of the Indian Airlines, where
he was shown the financial projections by the
Director of Finance, apparently under the
instructions of the Chairman, was a proce-
dure, which was totally outside the ordinary
course of business,

7.203 In the light of the foregoing, the Commission
feels that there has been a certain amount of avoidable
haste in rushing through the deal.

16. Detention of Smt, Gayatri Devi, Ex-Member of
Parliament and Lt, Col, {Retired) Bhawani Singh
under COFEPOSA Act, 1974.

7.204 By two sets of orders passed by the Central
Government on 24th July 1975, one being detention
order under section 3(1) and the other being declara-
tion tinder section 12A(2) of the Conservation of
Foreign Exchange and Prevention of Smuggling Acti-
vities Act, 1974 (.hereinafter referred to as COFEPOSA
Act), Smt. Gayatri Devi and Lt. Col. Bhawani Singh
were arrested and lodged in Tihar Jail at Delhi on
30th July, 1975. Smt. Gayatri Devi is the widow of
late His Highness Maharaja Man Singh of Jaipur. She
was a Member of Parliament as a Swatantra M.P. when
she was arrested. Lt, Col. Bhawani Singh had been a
full-time service officer in the Indian Army. He was
the recipient of the Mahavir Chakra for his gallantry
in the- 1971 war with Pakistan, He voluntarily retired
from Army service in November 1974 on personal
grounds.

7.205 The Income Tax Department conducted some
searches under section 132 of the Income Tax Act,
1961 in the month of February 1975 at Jaipur and
Delhi residences of Smt. Gayatri Devi, Lt. Col. Bhawani
Singh, his brothers and in other connected eases.
During the course of these search operations, gold, gold
ornaments, some foreign currency including; U.S.
Dollars and Travellers Cheques etc., were seized from
the residences of Smt. Gayatri Devi and Lt. Col. Bha-
wani Singh. A key of a locker in Rome of Shri
Bhawani Singh was also recovered.

7.206 After the news regarding searches by the
Income Tax Department was known, there were ques-
tions in both the Houses of Parliament in the month cf
February and March 1975. Giving replies to various
points raised in the Lok Sabha and Rajya Sabha, the
then Minister of Finance, Shri C. Subramaniam and
■Shri Pranab Kumar Mukherjee staled that enquiries in
these matters were in progress. Shri Pranab Kumar
Mukherjee specifically stated in Lok Sabha on 4th
March, 1975 that "no prosecution has yet been launch-
ed because we arc not in possession of 'full facts".

.7.207 Consequent to the information revealed during
income tax searches, various documents and papers
considered relevant from the point of view of violation
of the provisions of Foreign Exchange Regulation Act
were taken possession of by the Enforcement Directo-
rate of the Ministry of Finance from the Income Tax
Department and the said Directorate started making
its enquiries. These two persons were issued directives

by the Enforcement Directorate under section 33(2) of
the Foreign Exchange Regulation Act, 1973 for furnish-
ing information on the various points mentioned in
these directives.' On requests being made, Smt. Gayatri
Devi was allowed time upto 22-S-1975 and Lt. Col.
Bhawani Singh upto 20th August, 1975 'for making
necessary compliance to these directives.

7.208 Even before the time allowed to these two
individuals for complying with the directives issued had
expired, action to impound the passport of Smt. Gayatri
Devi was initiated and an order dated June 4, 1975
was passed by the Ministry of External Affairs im-
pounding her passport. Also enquiries were made to
tiud out ways and means for their arrest under one
of the other provisions of the Acts administered by the
Ministry of Finance.

7.209 A meeting is reported to have taken place
in this connection in the room of the then Minister of
State, Shri Pranab Kumar Mukherjee on July 24, 1975
which was attended, amongst others, by Shri G. S.
Sawhney, Director General of Revenue Intelligence and
Investigation. According to the statement of -Shri G. S.
Sawhney, he was asked either by the Minister or some-
body else who was present in the meeting to find out
whether any material which could be relevant for the
purpose of COFEPOSA Act was available against Smt,
Gayatri Devi and Col. Bhawani Singh. In his subse-
quent statement before the Commission, Shri Sawhney
lias stated that this meeting was some time before
lunch, the question that was being_..discussed in "the
meeting related to the detention of these two persons
and that it was imbued with a sense of urgency also.
He was thereafter told to provide the factual informa-
tion available with the Directorate to the Ministry.
Shri Sawhney has further stated that in the meeting
with the Minister, he got the impression that the Minis-
ter wanted the detentions to be made under
COFEPOSA Act and that an order should be passed
under section 3 of the COFEPOSA Act.

7.210 Shri Sawhney accordingly contacted the
Director, Enforcement and later the Dy, Director, in
charge of the Delhi Zone of the Enforcement Directo-
rate and asked the Dy, Director to come over to his
.office along with the material that was available against
the two persons. Accordingly Shri A. M. Sinha, Dy.
Director processed the material that was available with
him against both these persons in the room of Shri
Sawhney, prepared two sets of notes concerning these
two persons, showed these to his Director, Enforcement
Shri S. B.. Jain and passed these on ultimately to Shri
Sawhney. While processing the material that was
available with the Deputy Director of Enforcement,
against the two individuals, certain significant omissions
were made in reproducing the information contained in
the two letters which had been received from the
Reserve Bank of India in response to queries made by
the Enforcement Directorate concerning these two per-
sons after income tax searches. The substance of the
omitted portions from the Reserve Bank's two letters
dated 6th March, 1975 and 5th July, 1975 was to the
effect :

(i) that the Reserve Bank was aware of the fact
' that the ex-ruler of Jaipur had owned an
agricultural property and a flat in U.K. ; ■

, w ,,.,-- v - v . ;; ;,..- ; .. ■.;.-, ■•_-■;.;-■

, (ii) that the Reserve Bank was informed and had
due knowledge about the three trusts which
had been created in U.S.A., U.K. and
Bahamas by the late ex-ruler of Jaipur ;

(iii) the Reserve Bank had referred the matter to

the- Ministry of Finance, Department of Eco-
nomic Affairs, Government of India, as far
back as 1969 through their D.O. letters Nos.
EC. CO. FAS. 135/M(J-1)69 dated 31st

: July, 1969 to Shri Y. T. Shah and EC CO.

" FAS. 71/12-72 dated 28th April, 1972 to
Shri K. Subramanian and that the Govern-
ment's reply to these two letters was still
awaited and the Government had not advised
the Reserve Bank what stand they should
take in regard to these trusts.

These portions from the two letters of the Reserve
Bank,-I? incorporated in the material that was compiled
by the Deputy Director at the instance of the Director
General of Revenue Intelligence and Investigation and
approved by the Diiector (Enforcement) would have
shown that as far as these two persons are concerned,
they bad not made any concealment in regard to the
holdings of three trusts abroad and foreign property
owned by Lt. Col. Bhawani Singh.

• 7.211 Shri A. M. Sinha, Deputy Director has stated
in his statement before the Commission that these omis-
sions .were made probably at the instance of Shri
Sawhney, DGRI&I who wanted only the relevant
extracts of the letters and such portions from the RBl's
letters, as were mentioned to him were included by him
in the annexures to his note of July 24, 1975." Shri
Sawhney has said that he had only told the Deputy
Director to process the material with reference to the
relevant extracts. According" to Shri Sawhney's state-
ment, 'relevant' does not mean that whatever is relevant
should be deleted or whatever comes in their favour
should be deleted and this he could not have meant.
The Commission vjewsr this omission with grave
concern.

. ,J.212 According to Shri Sinha, when he was asked
to prepare the material, he was not told by any : o'ne
that the material was being compiled with a view to
detain. Smt. Gayatri Devi and Lt. Col. Bhawani Singh.
He came to know of their detention later lino ugh the
television news. He has also stated that in the fort-
nightly report for August he did not include these cases
as although these two persons were normally residing
in the Delhi Zone of the Enforcement Directorate,
proposals for their detention were not forwarded by
him. The Director (Enforcement) Shri S. B. Jain has
also, in his statement, said that in these cases the
detention orders were not initiated by the Enforcement
Directorate. The DGRI&I Shri Sawhney has- also
stated that he had, never suggested detention in these
cases.; According to him, the briefs prepared by Shri
Sinha and handed over to him did not amount to- any
proposallEor detention under COFEPOSA Act but were
prepared and passed oh to the Ministry of Finance in
order to give details of whatever information was avail-
able in the Enforcement Directorate. When the atten-
tion of Shri Sawhney was drawn to some of the notihgs

in the files of the Ministry of Finance where he was
referred to as 'sponsoring authority' for these deten-
tions, his reaction was that they had not initiated the
proposal for detention and reference to him as 'spon-
soring authority' was certainly a wrong terms to use.

7.213 The headings of the briefs prepared by Shri
Sinha and subsequently endorsed by Shri S. B. Jain,
Director, Enforcement and Shri G. S. Sawhney,
DGRI&I also show that the notes contained informa-
tion in respect of 'suspected violations of foreign
exchange' and did not at all indicate that these were in
the nature of proposals to the Government for detaining,
these two persons under the COFEPOSA Act.

7.214 According to Shri C. T. A. Pillai, Joint
Secretary, the subject of detaining Smt. Gayatri' Devi
and Lt. Col. Bhawani Singh was discussed in the room
of Shri Pranab Kumar Mukherjee on 24-7-1975 on
the basis of a rough note with the Minister. When his
personal opinion in this regard was asked for, he had
mentioned that on the basis of the available material
it seemed to him to be a marginal case. According to
Shri Pillai, from the trend of the conversation between
the Minister and the Finance Secretary, he got the im-
pression that the question of detention of these two
persons had already been considered and decided by
the Minister in consultation with the senior officials or
his colleagues. He felt that he had been called in
merely to complete the formalities expeditiously.

7.215 Shri Pillai has further stated that in the meet-
ing, the Minister had indicated that the Intelligence
Bureau had reported that Smt. Gayatri Devi was
already in or near Patna and may skip the country.
Hence, orders under section 3(1) and declaration
under section 12A(2) should be issued straightaway,
Shri Pillai thereafter prepared the proposals for the
detention and took these to the residence of Minister
of State, Shri Pranab Kumar Mukherjee on the same
date. Shri Mukherjee passed the following order in
the case of Smt. Gayatri Devi :

"I am satisfied that Smt. Gayatri Devi should be
detained as proposed. Ordered accordingly.
Declaration may also issue."

Similar orders were also passed in the case of Lt. Col.

Bhawani Singh.

7.216 It has been noticed that before taking a deci-
sion to detain these two persons under the COFEPOSA
Act the Minister had explored the possibility of. their
arrest under the Customs and Gold Control Acts also.
Some gold was also seized by the Income Tax Depart-
ment during the course of searches made by it. Shri
M. S. Mehta, the then Collector o'f Customs and Central
Excise at Delhi, who was consulted in this connection
by the Minister did not think that the material before
him constituted a customs case.

7.217 In the process of executing the order, the
services of the Home Ministry were utilised. Shri
Narasimhan, Joint Secretary, Home Ministry entrnsted
the work to one Dy. S. P. of Delhi Police — Shri Harpal

Singh. Though in the meeting, ^according to Shri
C. T. A. Pillai, the Minister is reported to have stated
that Intelligence Bureau has reported that Smt. Gayatri
Devi was already in or near Patna and may skip" the
country, Shri Narasirrihan, it appears was never told
about this as he directed Shri Harpal Singh to proceed
to Jaipur (and not to Patna) to execute the orders of
detention. Shri Harpal Singh returned the following
day and reported that the concerned individuals were
not available in Jaipur. It is not understood as to why
efforts were not made to send the officer for executing
the order to Patna if Smt. Gayatri Devi was in or near
Patna.

7.218 Eventually, the two persons were arrested on
30th of July in Delhi. No decision was taken at the
time of the issue of orders about the Class in Jail
where these persons were to be lodged. A note dated
1-8-1975 by Shri P. C. Jain, Deputy Secretary in the
Ministry of Finance in File No. 705/20/75-CUS. IX
shows that Shri Narasimhan, the then Joint Secretary
(IS) informed him that keeping her in ordinary Class
might invite adverse criticism and therefore the jail
authorities were asked to treat these persons as 'security
prisoners' and classified them accordingly. Subsequent-
ly, orders were passed prescribing conditions of deten-
tion giving them 'A' Class in the Jail. It is, however,
pertinent to mention that Smt. Gayatri Devi and Lt.
Col. Bhawani Singh did not get Class 'A* in jail as
there was no such class in male and female ^Vards.
Smt. Gayatri Devi was lodged in a separate room
(Office Room) in the same compound where other 'C
Class prisoners were residing. Col. Bhawani Singh was
put in *H* Class Ward and was given facilities of 'A'
Class prisoners in the matter of provision of furniture,
food etc.

7.219 In ordering the detention of these two persons
under COFEPOSA Act, the processes and procedures
prescribed by the Ministry of Finance have not been
followed. In this connection the following matters need
to be mentioned : —

(i) Omission to refer \their cases to the Screening
Comniittee. — A Screening Committee was
formed at the Centre consisting of
the representatives of the Ministry of
Finance (Department of Revenue , and
Insurance), Department of Personnel,
Ministry of Law and Directorate General of
Revenue Intelligence and Investigation. The
functions of this Committee were to advise
the Government or the officer empowered for
issuing detentions under section 3(1) of the
COFEPOSA Act, 1974 oh the desirability of
detaining any particular person. The stan-
dards applied by this Committee, it appears
were quite strict. According to Shri Sawhney,
DGRI & I who was a Member of this Com-
mittee. "A good percentage of the proposals
that came before the Committee for detention
under COFEPOSA Act used to get rejected".
From the information obtained from the
Ministry of Finance and from the deposition
of witnesses before the Commission, it has

been noticed that the departure from the
practice of referring cases to
the Screening Committee at

the time of first detention was made in the
case of these two persons only. Their cases
. were not referred to such Committee even for
ex post facto approval by rotation of files. In
reply to a question asked during the course
of evidence as to whether if these two cases
had been brought before the Screening Com-
mittee, the Screening Committee might have
considered the matter and came to a con-
clusion that this was not a case in which the
provisions of the COFEPOSA Act should bo
enforced, the reply of Shri Sawhney was that
"this is quite possible", Shri Pillai, Joint Sec-
retary in the Ministry of Finance has .stated
that he did not consider it necessary, to refer
the cases to the Screening Committee "since
the Minister had already made up his mind,
there was no need of Screening Committee's
opinion".

(ii) • Issue of Declaration under section 1 2 A (2 )

Along with orders under section 3(1), a dec-
laration under section 12A(2) waV also
issued in their cases. The adverse effect to
which a person is subjected to on account of
issue of a declaration under section 12 A (21
is that it no longer remains necessary to dis-
close to the person the grounds oh which the
orders have been made and to refer such
cases to the Advisory Board, which at the
relevant time comprised of three High Court
Judges. In the case of these two persons, no
grounds were indicated as to why declarations
under section 12A(2) were necessary. ■

(iii) Four monthly reviews under section 12/4(2)
of the COFEPOSA Act.— .Another safe-
guard provided in the Act is that
in those cases where declarations have been
, issued under section 12A(2), there would be
four monthly reviews to decide whether de-
tention of such persons continued to be
necessary for effectively dealing with; the
emergency. In the case of these two persons,
such reviews were also made after four
months but these seem to have been done in
a routine manner. Shri C. T. A. Pillai's ex-
planation for suggesting continuance of such
detention on two occasions, when he was
still looking after COFEPOSA work, is that
he did not consider it necessary to put up
detailed comments in this matter from his side ■
"as the decision to detain these two persons
was taken by the Minister".

(iv) Review in terms of guidelines issued in the
iear 1976. — The cases of such persons
were also not reviewed in terms of
guidelines issued by the Government vide
Confidential Circular F. No. 671/46/76-
CUS. VIII dated 24th November, 1976. It
was stated ■ in this circular letter

that all the relevant material against the per-
son to be detained has to be carefully
assessed to ensure that detention orders are
based on grounds which are adequate and
that innocent persons are not victimised and
that past cases should also be examined and
recommended for review by the concerned
detaining authority.

' 7.220 A very striking feature concerning these
■arrests seems to be the urgency with which the whole
matter was processed in the course of one day — i.e.
24th July 1975 itself. What exactly transpired on
24th July 1975 which necessitated such expeditious
action for issue of orders relating to arrest remains
unexplained because Shri Pranab Kumar Mukherjee
has not chosen to come before the Commission and
give evidence. 'I

7.221 After these two persons were arrested and
lodged in Tihar Jail, they addressed two letters dated
22nd August, 1975, to Deputy Commissioner, Delhi
Administration, Delhi, who forwarded these to the
Ministry of Finance for necessary action. A request
was made in these representations for release from
detention mainly on health grounds. It was also stated
in these representations that these persons had never
indulged in any anti-national activities or smuggling
activities etc. It was also stated by Smt Gayatri Devi
that whatever foreign exchange she was receiving
through trusts abroad was fully taxed by the Indian
Government and was regularly being declared by her
in her Annual Wealth Tax and Income Tax Returns.

: 7.222 These representations were examined by the
Joint Secretary, Shri C. T. A- Pillai on September 7,
1975 and he recorded a note posing whether both these
persons should be temporarily released for a period of
eight weeks. The Finance Secretary, Dr. H. N. Ray,
endorsed the- note of the Joint Secretary, Mr. Pillai, on
the same day with" the remarks that the note was
recorded by Mr. Pillai in consultation with Mr. Ray.
Thereafter the file was marked to MRE, the then
Minister of Revenue and Expenditure, Mr. Pranab
Kumar Mukherjee. Mr. Pranab Kumar Mukherjee
recorded a note on September 7, 1975 which reads as
under : —

"May be released on parole as proposed. How-
ever P.M. may kindly like to see."

7.223 Shri Mukherjee marked this note to P.M.
The Secret Movement Register maintained by the then
Personal Staff of the Minister of Revenue and Expendi-
ture, Shri Pranab Kumar Mukherjee, which has been
put up before the Commission, shows that the relevant
file bearing No. 686/100/75-CUS. VIII/75 with the
notes of Shri C.T.A. Pillai and F.S. indicating the
subject "Representation from Smt. Gayatri Devi and
Shri Bhawani Singh" was marked to Shri Dhawan,
A.P.S. to P.M. on September 7, 1975 and was sent
in a sealed cover. What decision was taken by the
Prime Minister in this matter is not indicated in the
file, but it has been noticed that Shri Pranab Kumar
Mukherjee pasted his earlier note dated September 7,
1975 recommending release on parole. If the note
sheet page is put against bright light, the noting of
S/39 HA/77— 12

Shri Pranab Kumar Mukherjee reproduced earlier can
be easily read. This file was put up before the Com-
mission, Shri CT.A. Pillai has also stated in his
deposition that perhaps at the time of first parole, the
file had gone to the Prime Minister.

7.224 After pasting his earlier note, Shri Mukherjee
recorded another note on September 12, 1975 wherein
he ordered the rejection of the request regarding the
revocation o'i the order of detention. Since Shri Pranab
Kumar Mukherjee has not chosen to appear before the
Commission, and give evidence and explain the various
matters attributable to him, it can only be inferred that
his subsequent noting rejecting the request for revoca-
tion of the detention order may have been on the advice
of the P.M.

7.225 Subsequent to rejection of their request on
September 12, 1975, these persons moved applications
for release on parole and these were accepted. Shri
Bhawani Singh was ordered to be released on parole
on 1st November, 1975 and Smt. Gayatri Devi on 9th
January, 1976. It has, however, been noticed lhat
Smt. Gayatri Devi, before her release, addressed a
letter to the Prime Minister dated 11th December,
1975 from jail which reads as under : —

"As the International Women's Year is coming to
an end, may 1 take this opportunity to assure
you, Madam, all my support to you in person
and your programme in the interest and
betterment of our country. May I also add
that I have decided to give up politics ever
since Rajaji's demise and will not take any
further interest in politics as the Swatantra
Party has already defunct and I have decided
not to join any political party.

In view of what I have stated above, as
well as my deteriorating health, in spite-of
the medical facilities allowed and provided
to me, may I request you for gracious con-
siderations that I may be released. If there
are any conditions which you want to impose,
I will try to abide by."

This was forwai'ded to the Prime Minister through Jail
Superintendent and District Magistrate, Delhi, on 16th
December, 1975. Tt has not been possible for the
Commission to trace this letter from the Prime Minis-
ter's Secretariat and find out what orders were passed
by the then Prime Minister on the same.

7.226 Before her release on parole, the authorities
in the Ministry of Finance also seem to have insisted
that her request should be granted only if she is pre-
pared to withdraw her writ petition 'challenging her
detention etc' pending before the Delhi High Court.
The note of the Joint Secretary, Shri Pillai, which was
approved by the Minister, Shri Pranab Kumar
Mukherjee dated January 8, 1976 on this matter reads
as below : —

"As M(RE) is aware, the detention of Smt.
Gayatri Devi has been challenged in writ
proceedings in the Delhi High Court. It is
only proper that if her request for 5 temporary
release is acceded' to, we insist on the writ

petition being withdrawn. On informal
enquiries I understand that the petitioner
would be willing to do so."

The duration of parole was extended from time to time
on the conditions stipulated at the time of initial release.
These conditions envisaged residence within the speci-
fied places, movement outside these places with the
consent of the concerned Collectors of Central Excise, ^
and execution, of a bond with surety for a sum of
Rs. 50,000. >

7.227 The matter relating to the revocation of
detention order finally came up before the Review
Committee of the Department of Revenue on March 14,
1977. Before putting up the matter to the Review
Committee, the comments of the then Director Enforce-
ment, Shri S. B. Jain, were called for. Though Shri
Jain had earlier stated that he is not concerned with
these detentions, at this time he made a positive recom-
mendation stating that the detaining authority may like
to consider the release of Shri Bhawani Singh for the
time being and the case of Smt. Gayatri Devi could be
considered later on. The Committee considered the
nature of the prejudicial activities attributed to the
two persons and felt that a view could be taken for
revocation of both the detention orders but left the
matter for the decision of the Minister 'for Revenue and
Banking. Shri Pranab Kumar Mukherjee thereafter
passed the following order on March 19, 1977 : — ■

"Initially Col. Bhawani Singh may be released
and his activities kept under close watch and
the case of Smt. Gayatri Devi may be decided
after some time."

Order of release of Smt. Gayatri Devi was passed by
the Delhi Administration on 22nd March 1977 after
the revocation of the proclamation of emergency.

7.228 The manner in which Smt. Gayatri Devi was
treated in the jail makes a very poignant reading. She
has narrated her experience in the jail before the
Commission. The Assistant Jail Superintendent has
also given a statement in this regard. She was not at
all, well when she was taken to the jail and was under
medical treatment at the time of her arrest. According
to her, the conditions in Tihar Jail were absolutely
appalling; there was complete lack of sanitation, no
running water, the public latrines had failed and (here-
fore all the people who were in the prison had to use
the drain to ease themselves. Rajmata Vijiya Raje
. Scindia of Gwalior was also brought to Tihar Jail
' and was kept in a 'Phansi Kothi', (Cell for condemn-
ed . prisoners) for want of any other accommodation.
This cell happened to be next to the room where
Smt. Gayatri Devi was living. The treatment of the
women prisoners in the jail was not at all good. Even
the women prisoners who were pregnant were not
treated properly so much so that one of the ladies
gave birth to a child in the lavatory. Smt. Gayatri
Devi wrote a letter to the Prime Minister at the ins-
tance of her son Jai Singh, who advised her that the
only way of getting out of the jail was to write a
letter to the Prime Minister. She had lost 10 Kgs
m weight and her blood pressure was very low. '

7^229 Shri Pranab Kumar Mukherjee was issued
a notice under rule 5(2) (a) of the Commissions of
Inquiry Rules. He declined to file a statement as
required by the rules. He was also served with a
summons under section SB of the Commissions of
Inquiries Act. He refused to give evidence on oath
in pursuance of the summons issued under section 8B
of the Act.

7.230 According to the guidelines issued by the
Finance Ministry, the COFEPOSA Act was- intended
to be applied for dealing with the cases of smugglers,
foreign exchange racketeers or such foreign exchange
violations as were having a nexus with smuggling. It
was not intended to be resorted to for dealing .with
minor infractions under the Foreign Exchange Regula-
tion Act. It is clear on the basis of evidence that
has been brought on record that these two persons had
no nexus whatsoever either with smuggling or with
foreign exchange racketeering. Shri G. S. Sawhney,
Director General of Revenue Intelligence and Investi-
gation has, during the course of his statement before
tfie Commission, given a categorical 'no' when he was
asked to state whether he had any reason to believe
that these two persons belonged to any organised gang
of smugglers. There is nothing on record also to show
their connection in any way with such activities. Thus
it is abundantly clear that in the cases of these two
persons, the provisions of the COFEPOSA Act were
not at all applicable and these were resorted to, to
give effect to a pre-determined decision to arrest these
two persons. At worst, these two persons may have
been guilty of infractions of the provisions' of the
Foreign Exchange (Regulation) Act, for which pro-
ceedings were already in progress. Such infractions
under FERA are not to be dealt with by detentions
under the COFEPOSA Act, as was done in the cases
of these two individuals in utter disregard of the poli-
cies and guidelines which had been laid down by the
Finance Ministry.

7.231 It is thus cleat on -the -basis of evidence that
has been brought on record that Mr. Pranab. Kumar
Mukheriee, the then M : nister of Revenue and Banking
has misused his position and abused his authority in
ordering the detention of Smt. Gayatri Devi and Col.
Bhawani Singh on wholly insufficient grounds. 'It is
a clear case of subversion of lawful processes and of
administrative procedures.

17. Detention of Shri Bhim Sen Sachar and seven
others.

7.232 Shri Bhim Sen Sachar, aged 82, veteran free-
dom fighter, and Ex-Governor Andhra Pradesh,
Orissa, Ex-High Commissioner of India in Sri Lanka
and Ex-Chief Minister, Punjab; and S/Shri Sewak
Ram, Chairman, Demi Branch of the Servants of the
People Society; Vishnu Datt, Executive Secretary, Citi-
zens for Democracy; K. K. Sinha, Advocate, Supreme
Court; S. D. Sharma of Indian Service Mission; J. K.
Sharma, Head of the Philosophy Department, Hans
Raj College, Delhi University; Krishan Lai Vaid, Sar-
vodaya Worker; and J. R. Sahnj of Adhyatama
Sadhna Kendra, all around or above 60, had jointly
addressed an open letter dated July 23, 1975 to

Smt. Indira Gandhi, the then Prime Minister of India.
Some extracts from that letter are as follows :

(2) "We- are amongst the very humble of your
fellow countrymen, just ordinary citizens in-
terested cliiefly in constructive work, none
of us belonging to any political party. We
have' no political axe to grind nor are we
interested in any political office or power.
Our chief interest is in upholding the freedom
and dignity of the individual."

(3) "We regard Pandit Jawaharlal Nehru as one
of the Principal architects of Indian demo-
cracy. He used to say 'No one, however
great he may be, should be above criticism'.
It was he who had said about the freedom
of the press : —

'To my mind, the freedom of the press is not
just a slogan from the larger point of view
but it is an essential attribute of the demo-
cratic process. I have no doubt that even
if> the Government dislikes the liberties
taken by the press and considers them
dangerous, it is wrong to interfere with
the freedom of the press. By imposing
restriction you do not change anything;
you merely suppress the public manifes-
tation of certain tilings thereby causing the
idea and thought underlying them to spread
further. Therefore, I would rather have
a completely free Press with all the dan-
gers involved in the wrong use of that
freedom than a suppressed or regulated
press.'

It was he who gave the memorable slogan
when the British came down heavily upon
us in the freedom struggle : 'Freedom is in

peril, defend it with all your might'. We
sorrowfully remember him for, had he been
alive today, we have no doubt that he would
; have given the slogan :• 'Democracy is in

peril; defend with all your might*."

(6) "We do not, we repeat, challenge your right
to arm yourself with additional powers even
when ample powers are with you already
for dealing with offenders against law;' what,
however, we fail to appreciate is the denial
of normal opportunities to the people — to
all the people — to discuss openly the merits
and demerits of Government measures. Our
democracy is not yet out of the woods and
many are bound to feel puzzled over what
meets their eye."

; (7) "... It would be an outrage on

■ , parliamentary democracy if even 'our Par-
liament's proceedings cannot be published
without pre-censorship: "

(8) " We hope with all our heart

that the arrested members of Parliament will
not be deprived of the opportunity to have
S/39 HA/77— 13

their say in the current session of Parliament.
Was it really necessary to withhold from
the public even the names of the political
leaders and workers you have arrested and
to deny facilities to their near and dear ones
to meet them and arrange their legal defence,
if any such defence is at all possible in the
midst of present ordinances "

(9) "Apart from your political supporters, the
common people of Delhi now (alk in hushed
tones as they do in communist societies; they
do not discuss politics in the coffee house
or at the bus stand and look over their
shoulders before expressing any opinion. An
atmosphere of fear and political repression
prevails and politically conscious citizens
differing from your viewpoint prefer to ob-
serve a discrete silence, with some of them
afraid of the mid-night knock on their door."

(10) "Must the monster of Eef.r devour us again,
the monster for the annihilation of which our
beloved leader Pandit Jawaharlal Nehru had
sacrificed his all — his riches, his comforts,
his parents and even the dearest deity of his
heart. He held fear to be enemy No. I of
India's destiny. |t is well to seek fresh ins-
piration from his j memorable words : —

'The great gift for an individual or a Nation,
so we have been told in our ancient
books, was Abhaya (fearlessness), not
merely bodily courajge but the absence of
Tear from the mind. Janaka and Yajna-
valka had said, at the dawn of our history
that it was the function of the leaders of
a people to make them fearless. But the
dominant impulse in India under British
rule was that of fear-perverse, oppressing,
strangling fear; fear of the army, the police,
the widespread secret service; fear of law
meant to suppress, It was against, this
all pervading fear that Gandhi's quiet and
determined voice was raised :

'Be not afraid'."

(11) "The present situation looks every citizen
in the face enquiringly and the old surviving
freedom fighters in particulars. We must
respond to the call. Accordingly, we pro-
pose, with effect from August 9, 1975 and.
regardless of consequences to ourselves, to
advocate openly the right of public speech
and public association and freedom of the
Press, for discussing the merits and demerits
of the Government arming itself with extra-
ordinary powers. The intention is not to
embarrass authority or to cause any unneces-
sary stir. Our self-suffering will just be an
humble offering at the feet of the Mother-
land, in the breaking of whose chains we
had been privileged to play our small part
inspired 'by the mighty lead of the Father of
the Nation."

7.234 This letter was received in the P.M's Secre-
tarial and is available in their file. According to the
affidavit of Mr. S. D. Sharma and depositions of
S/Shri Sewak Ram and K. K. Sinha, this letter was
delivered at the then Prime Minister's House on July
24, 1975. Shri Bhardwaj, a life member of the
Servants of People Society stated before the Commis-
sion that he himself had delivered this letter at the
P.M's house on July 24, 1975 and obtained an
acknowledgement dated July 24, 1975 which was pro-
duced, before the Commission. Shri Bhardwaj, when

• asked as to whom the letter was delivered, replied
"I think to Mr, Dhawan" but actually it had been
acknowledged by one Mr. M. N. Sharma, who was
the P.A. in the Prime Minister's Establishment. Shri
Sharma identified his signatures and confirmed that he
had received the copy of the letter and signed the
receipt on the day on which the letter was handed
over to him. It is seen from the letter that it was
diarised in the office of the Secretary to the Prime
Minister. From the alterations made in the date
and diary number of this letter, clearly visible in the
letter, it appears that an attempt was made to make
the date appear as 28th instead of the original 24th
so as to show that the letter was received after these
persons had been detained.

7.235 According to Shri Sushi! Kumar, the then
D.M., Delhi he had received a phone call from Shri
Dhawan around 2,30 p.m. on July 24 or 25, 1975,
to go over to the P.M's house, Immediately after his
arrival at the P.M's house, he was also joined
by Shri Bhinder, the then D.I.G. Shri Dhawan told
Shri Sushil Kumar and Shri Bhinder that it Bad been
decided that Shri Bhim Sen Sachar and seven others
had to be arrested under MIS A. The relevant ex-
tract from the deposition' of Shri Sushil Kumar is
reproduced below : —

"Chairman : Were the other names given to you ?

, ' Witness: No, Sir, No Sir. Only Mr. Bhim Sen
Suchar's name was mentioned and seven
others. I asked as to what exactly had
happened. Then T think it was Mr. Bhinder
who probably mentioned that some commu-
nication had been circulated to the Prime
Minister. This about all that was mention-
ed and the decision has been taken that these
people should be arrested under MISA.

Chairman: Decision taken by whom ?
Witness: By the Prime Minister, Sir..:' "

1 7.236 While talks among these three were going on,
Shri Sanjay Gandhi walked in and Shri Dhawan told
him what he had been telling Shri Sushil Kumar and
Shri Bhinder. According to Shri Sushil Kumar, the
manner in which Shri Sanjay Gandhi reacted to what
Shri Dhawan told him in t3ie presence of Shri Sushil
Kumar and Shri Bhinder about the directions for the
arrest of Shri Bhim Sen Sachar and seven others, give
him the impression that Shri Sanjay Gandhi knew that
such a decision had been taken. Shri Sushil Kumar
told Shri Dhawan that the latter would have to talk to
Shri Krishan Chand, L.G- to obtain his clearance for

the arrest of these persons. Shri Dhawan said that he
would talk to the L.G. Shri Sushil Kumar also stated
that Shri Dhawan had assured him that the police
authorities would take care of the material required for
the detentions to be furnished to the A.D.Ms to ena-
ble the A.D.Ms to issue MISA warrants. There-
after Shri Sushil Kumar went to L.G. The L.G. told
him that he had been informed by Shri Dhawan' about
the arrests under MISA to be made, and that Shri
Sushil Kumar should coiwey this decision to the
A.D.Ms Shri Sushil Kumar thereafter told the
A.D.Ms that as soon as the request came from the
police authorities for detention of Shri Sachar and
seven others, it should be complied with.

7.237 Shri Krishan Chand, in his deposition before
the Commission, has stated that he had received a
call on RAX telephone from Shri Dhawan on July
25. Shri Dhawan told him that the Prime Minister
had directed that Shri Bhim Sen Sachar and others
should be arrested and that he had communicated the
orders to the D.M., Delhi. ' Shri Sushil Kumar had
also told him that he was called to the P.M's' house
and was told by Shri Dhawan that these persons had
to be arrested because they had written some letter
against the Emergency. To the query made by the
Commission whether it was correct for the Commis-
sion to understand that directions for the arrests under
MISA were passed by some one and the District
Magistrate carried out these orders through the Addi-
tional. District Magistrates, who were merely stamp-
ing authorities putting down their signatures, Shri
Krishan Chand said that that was exactly what
happened in this particular case. Shri Krishan
Chand pleaded that his mind did not function on the
propriety regarding these arrests, since the orders
were communicated to him and to the D.C. in
the name of the Prime Minister. Shri Krishan Chand
snid that lie was absolutely certain that the P.M. her-
self had passed orders for the arrest of these persons
because he felt that such eminent persons couid not
be detained without her sanction,

7.238 Accordingly, Shri P. Ghosh, the then
A.D.M. (South) issued the detention orders under
MISA in respect of five of the eight persons, namely,
S/Shri Sewak Ram, S. D. Sharma, J. K. Sharma,
Vishnu Datt and K, K, Sinha. In his written state-
ment given to the Commission, Shri Ghosh has said
that the detention orders were issued on the specific
directions of the D.M., who had stated that it was
the wish of the Prime Minister. In his deposition
Shri Ghosh has said that the detention orders were
issued even before the receipt of the material from
the police. Actually, the material was received by
the A.D.M. after the warrants had been issued but
was sent pre-dated by the police. Therefore, there
was no question of any satisfaction by the detaining
authority on the material placed before him. This
A.D.M. in his deposition also stated that in a large
number of cases of detentions under MISA in Delhi
the material on the basis of which detentions were
made, was received subsequent to the issuance of
the warrants of detentions ; and, such as, there was
no question of satisfaction of the detaining authority
as contemplated in section 3 of the Act.

• 7.239 Smt. Meenakshi Dutta Ghosh, who had issu-
ed the detention order against Shri Bhim Sen Sachar
has also stated in her written statement to the Com-
mission that the order was issued on the specific direc-
tions of the D.M., Delhi who had stated that it was
the P.M's wish. She has also stated that the grounds
for the detention of Shri Sachar were received after
the warrant had been issued and were sent pre-dated
by the police. She admitted that she had not applied
her mind to the grounds. Shri S. L. Arora and Shri
Ashok Pradhan who had issued detention orders
against Shri J. K. Sharma and Shri Krishan Lai Vaid
respectively have also stated that these detention
orders were issued under the directions of the D.3V1.,
Delhi, who told them that a decision to detain these
persons under MIS A had been taken. AH the
A.D.Ms, have frankly stated that there was no -ques-
tion of their feeling satisfied about the grounds of
detentions.

7.240 The Commission has observed that the prac-
tice of issuing warrants of arrest, first and obtaining
the pre-dated grounds of detentions thereafter had
become the general pattern so far as the detentions of
persons under MISA in Delhi during emergency were
concerned.

7.241 Shri Blunder, as usual, has totally denied his'
presence in t'he Prime Minister's house, as stated by
Shri Sushil Kumar. However, Shri Prakash Singh,
the then S.P. (North) has deposed before the Com-
mission that he hadjnoved-the-proposal for the deten-
tion "of Shri J. K. Sharma, one of the signatories of
the letter after Shri Bhinder.had ordered him to this
effect on telephone and also communicated to him the
name, address and grounds for the detention of Shri
J K. Sharma. According to Shri Prakash Singh,
Shri Bhinder had also told him that decision in this
regard was taken at a higher level.

7.242 The grounds of detention compiled by the
police against all these eight persons and furnished to
the A.D.Ms, show that except in the case of Shri
Krishan Lai Vaid the grounds were drafted almost
entirely from the open letter addressed by these per-
sons to Smt. Gandhi by distorting the thoughts set
out in the letter. Reports on the activities of these
persons received from the C.I.D., Special Branch,
Delhi Police, revealed no worthwhile material in res-
pect of these persons which could be interpreted as
prejudicial to the security . of the State and
justify detention of any of these persons under MISA,
It is clear that these persons were detained for having
written an open letter to the then Prime Minister
though the contents of the letter by themselves do not
constitute adequate enough grounds to warrant their
detention under MISA. These detention orders were
executed on 25/26th of July and all of them except
Shri Krishan Lai Vaid were transferred to the Central
Jail, Ambala on the 26th of July, 1975, which added
hardships to the family members of the detenues in
the sense that their family members could not avail

of the facilities of weekly interviews with the detenues
without incurring considerable expenditure and under-
going strains of journeys. The Lt. Governor, Delhi,
confirmed the detention orders in respect of Shri

J. K. Sharma on the 30th of July, 1975, Shri Krishan
Lai Vaid on 1st August, 1975 and Shri Bhim Sen
Sachar and others on 3rd August, 1975.

7.243 The wife of Mr. Bhim Sen Sachar filed a
writ petition in the High Court of Delhi on the 6th
August, 1975 challenging the detention of her husband..
The detention orders against Mr. Bhim Sen Sachar were
revoked by the Lt. Governor on 31st August, 1975,
.one day before the date fixed for hearing in the High
iCourt of the writ petition filed by the wife of Shri
Bhim Sen Sachar. The detention orders in respect

• joE Shri Sewak Ram were also revoked on 31st
August, 1975.

7.244 It is not understood why the remaining six
detenues, all of whom were arrested along with Shri
Sachar and Shri Sewak Ram were not released along
with- these two. Shri Krishan Chand has stated in
this connection that in all matters relating to these
detentions, viz., issuance of detention orders, confir-
mation and release, he was acting under the instruc-
tions of the then P.M. and if it had been on his own
volition, he would have released the remaining six
detenues also when M/s. Bhim Sen Sachar and Sewak
Ram were released. Shri Vishnu Datt suffered a
severe heart attack on 14th July, 1975 and in view of
his serious condition the detention orders against him
were also revoked by the Lt. Governor on September
16, 1975. Shri Krishan Lai Vaid, Shri K. K. Sinha,
Shri J. R. Sahni, Shri J. K. Sharma and Shri S. D.
Sharma suffered detention till 2nd of April, 1976.
Their cases were reviewed mechanically during this
period at the time of four-monthly reviews and the
Lt. Governor affirmed their continued detention every
time. On 2nd of April, 1976, the Lt. Governor
approved the proposal to revoke the detention orders
against the remaining five persons.

7.245 The story of detention of Shri Bhim Sen
Sachar and seven others provides a classic example
of the misuse of the provisions of MISA. The manner
in which the police and the Magistrates went about
compiling grounds and issuing the detention orders,
should be a warning to any Government against giv-
ing such vast and arbitrary powers in the hands of
authorities without providing effective and compell-
ing safeguards against their possible misuse. This
and similar cases which have come to the notice of
the Commission reveal an undesirable trend in the
administration of the Maintenance of Internal Secu-
rity Act in the sense that when, as in this' case, the
Prime Minister felt satisfied about the detention of
certain persons, instead of getting the orders issued
by the Central Government, small functionaries like
the Additional District Magistrates were directed to
issue the warrants without they themselves being satis- .
fied either about the need for detentions of the indi-
viduals concerned or the adequacy of grounds for
their detention.

7.246 A notice under rule 5(2) (a), of the Com-
missions of Inquiry Rules and a summons under sec-
tion 8B of the Commissions of Inquiry Act were issu-
ed to Mrs. Gandhi and Mr. R. K. Dhawan in tfiis
case. Smt. Gandhi did not respond to the notice.

When she, however, turned jup in response to the
summons under Section SB, she refused to take the
oath and tender evidence. Shri R. K. Dhawan res-
ponded to the summons under section 8B and led
evidence. Shri Dhawan has stated that at about 1.30
or 2.00 p.m. on the day of the arrest of Shri Bhim
Sen Sachar, Shri Sushi! Kumar had gone to him and
told him that they, thereby meaning L.G. and the
detaining authorities, had taken a decision to detain
8 persons including Shri Bhim Sen Sachar because
"the C.l.D. had intercepted some letter written by
Shri Bhim Sen Sachar and they had apprehension that
this will serve some sort of a think in Delhi and they
wanted to arrest all the persons". The L.G. warned
this to be brought to the notice of the Prime Minister
and ascertained whether she wanted any distinction
to be made in the case of Shri Bhim Sen Sachar or
not. According to Shri Dhawan he had consulted
the Prime Minister and conveyed to Shri Sushi]
Kumar her reaction that it was a matter for the L.G.
and the Delhi Administration to decide and that she
had nothing to do with it. In reply to a specific
query from the Commission, Shri Dhawan stated that
the P.M. did not express any surprise about the con-
tents of tht letter. The relevant extract from the
deposition of Shri Dhawan on this point is reproduced
below : —

"Chairman : (Towards Mr. Dhawan) Now, did
vou come to know when Mr. Sushil Kumar
came to. you. Did you know that a letter
. was addressed by Mr. Bhim Sen Sachar and
seven others to the Prime Minister, before
that date ?

Witness: No, I did not know.

Chairman: Before that time ?

Witness: No, I did not come to know.

Chairman: Did the Prime Minister know about
such a letter having been received ?

Witness: When I mentioned it to her that this
is..... ....She said that is for the Delhi Ad-
ministration, so I did not ask her.

Chairman: I just want to know. Did she ex-
press any surprise about the contents of the
letter of what the letter was about. What
was written in that letter

Witness: No, she did not tell anything.

Chairman: So, from that it appeared that a
letter had been received.

Witness: Yes.". ' '

7.247 Shri Dhawan also confirmed that he had also
spoken to the L.G. when the L.G. had rung up in
some connection and told him that the D.C had gone
to Shri Dhawan in this connection and the P.M. had
said that "It is none for me to decide. It is for Delhi
Administration to decide",

7.248 The defence tendered by Shri Dhawan is not
convincing. There is conclusive evidence to show
that the letter was delivered at the PM's house on Tulv

24. 1975, by Shri Bhardwaj, a Life Member of thr

Servants of the People Society. There had been an
effort made to tamper with the date and diary, num-
ber of the letter so as to make it appear that the date
of receipt was 28th and not 24th. Shri Dhawan nas
taken the defence that the detention was a sequel to
a copy of the said letter coming to the notice of the
Delhi Administration through interception. This
theory is also not tenable. It is difficult to believe
that the letter coming to the notice of the authorities
through interception on July 25 could have led to such
prompt action by way of detention under MISA on
25th itself against Shri Sachar and six others and od
the 26th morning against the remaining one. This
interception theory which has evidently been thought
of as a foil against any possible criticism against the
then Prime Minister, stands completely demolished
from the replies to the questions put to Shri Sushil
Kumar and Shri Krishan Chand by the counsel for
the Commission in this connection. Shri Krishan
Chand has said that he had come to know for the .first
time when Shri Dhawan telephoned him that the then
Prime Minister had directed that Shri Bhim Sen
Sachar and others should be arrested and that prior
to that moment of time, no so-called interception of
this letter had ever come to his notice. Shri Sushil
Kumar has also confirmed that prior to his meeting
with Shri Dhawan, he did not know of the existence
of any letter written by these persons to the then Prime
Minister. ".

7.249 There is yet one more infirmity in the theory
of this interception. The Commission in the course
of examining the Superintendent of Police, C.l.D,
Shri K. S. Bajwa, brought out that on the day the
copy of the letter was purported to have been inter-
cepted, the C.l.D. did not enjoy any authority to
intercept that letter. However, an order was pass-
ed by the Government o'n August 4, 1975, with re-
trospective effect covering the period from July J,
1975, onwards.

7.250 In the light of the evidence brought on
record, the Commission feels that the decision to
detain Shri Bhim Sen Sachar and seven others was
taken by Smt, Gandhi which she got conveyed to
the authorities in Delhi Administration through Shri
Dhawan. The only fault of these eight gentlemen
appears to have been the open letter that they had
addressed to Smt. Gandhi. Prima facie the con-
tents of the letter do not warrant the authors oT the
letter to be detained under . MISA. Smt. Indira
Gandhi has abused her position and misused her
power in ordering the arrest of Shri Bhim Sen Sachar
and seven others.

1 8. Improprieties committed in regard to Shri Mangal
Beliari, IAS of Rajasihan Cadre ; and termina-
tion of the services of Smt. Chandrawati
Sharma, Assistant Teacher.

7.251 On August 20, 1975, the Chief Secretary,
Rajasthan, initiated the following actions ; —

(a) A top secret d.o. letter No, 5993/CS/l,
dated August 20, 1975 was addressed to
District Magistrate, Jaipur, desiring that
Shri S, N. Sharma, Advocate, be detained

under MISA on certain grounds mentioned
therein;

(b) A top secret note was sent to the Education
Commissioner to the effect that the Univer-
sity may be asked to terminate the services
of Smt. Chandrawati Sharma, because on
information received, the Government was
. satisfied that she was an active follower of
Anand Marg and her continuance in service
was not desirable in the interest of the Uni-
versity or of the public;

(c) A top secret d.o. letter dated August 20,
1975 was addressed to the Inspector-Gene-
ral of Police, Rajasthan for initiating inquiry
into the conduct of Shri Gaur, Additional
Superintendent ot Police, Jaipur;

(d) Shri Mangal Behari, IAS, the then Mem-
ber, Board of Revenue, Rajasthan, was told
on 20th August, 1975 to apply for leave.

7.252 Pursuant to the d.o. letter of the Chief Sec-
retary dated August 20, 1975, the District Magistrate,
Jaipur, detained Shri S. N. Sharma, under MISA on
the same day. The detention orders were confirmed
by the State Government with the approval of the
Chief Minister subsequently,

7.253 On receipt of the top secret Note concerning
Smt. Chandrawati Sharma, the Education Commis-
sioner, sent instructions to the Joint Director
(Women), Jaipur — Ajmer Range, through a letter
dated August 23, 1975 : —

"On ' the basis of information received the
■t, Government is satisfied that Smt. Chandra
Sharma w/o Shri S. N. Sharma,
Advocate, * * * who is working as
Assistant Teacher, in Maharaja Girls Higher
Secondary School, Jaipur is actively
associated with 'an organisation declared
illegal and her continuance in service is not
desirable in public interest.

• "You are, therefore, requested to terminate her
services forthwith, under intimation to the
undersigned."

On August 23, 1975, the Joint Director, accordingly
terminated the services of Smt. Chandrawati Sharma
with immediate effect and informed all concerned, in-
cluding the Education Commissioner in that behalf.

7.254 Pursuant to a letter dated August 20, 1975
addressed to the Inspector General of Police, Rajas-
than, inquiry was conducted against Shri R. N. Gaur.
A report was received from the Inspector-General of
Police on September 3, 1975 exonerating him.

7.255 Shri Mangal Behari was also asked on the
20th of August, 1975 by the Chief Secretary to go on
leave.

7.256 All this action simultaneously taken against
three public servants and Shti S. N. Sharma Advocate,
Was because of an intimation received from Shri R. K.
Dhawan, Additional Private Secretary to the then

S/39 HA/77— 14

Prime Minister of India earlier in the morning of
that day on phone.

7.257 Shri Harideo Joshi, the then Chief Minister
of Rajasthan has deposed that he received a tele-
phonic message on August 20, 1975 from Shri R. K.
Dhawan, Additional Private Secretary to the then
Prime Minister .and that he conveyed certain infor-
mation. He stated that he recorded the information
conveyed to him in Hindi on a slip of paper and,
thereafter, he recorded the note in English, after
discussion with his officers, to the following. effect: —

"Shri R. K. Dhawan, Private Secretary to the
Prime Minister rang me up to convey the
following: —

1. Shri S. N. Sharma, Advocate, 74-Sarojini

Marg, Jaipur, is reported to have burnt
records relating to his and his wife's
, activities as followers of Anand Marg,

Shri R. N. Gaur, Addl. S.P., in spite of
being informed about the burning of re-
cords, did not reach in time and allowed
the records to be burnt. It was desired
that Shri S. N. Sharma should be detain-
ed under MISA.

2. His wife Shrimati Chandra Sharma, Lec-

turer in Maharani's College, Jaipur,
should be removed from service.

3. An enquiry should be conducted immedia-

tely in the conduct of Shri Gaur.

2. It was also desired that Shri Mangal Behari
IAS should also be relieved from service.

"Please take necessary action.

Sd : Harideo Joshi
20-8-75.
Chief Minister, Rajasthan."

7.258 After Shri Harideo Joshi, then Chief Minister
communicated the information received from Delhi
to the Chief Secretary, an order of detention was
passed against Shri S, N. Sharma under MISA on
August 20, 1975. Shri G. Ramachandra, the then
Collector and District Magistrate, Jaipur, has stated
that from the letter of the Chief Secretary it was "very
clear that no discretion was left with me in not arrest-
ing Shri S. N. Sharma. In spite of this order, before
passing the order of detention, I had before me the
report from District Superintendent of Police, Jaipur.,,,
requesting his detention under MISA. Before pass-
ing the order of detention, this report was also in my
view."

7.259 There was, it appears, evidence before the
District Magistrate, received through proper channels,
that Shri S. N. Sharma had joined Anand Marg in
1963 and had since then been meditating regularly on
the lines of Anand Marg, and that he had been widely
advocating for the Anand Marg when the Govern-
ment of India had banned that organisation; and
hence his activities had posed a threat to the internal

security.. of the. country, The Station House Officer
also recommended the detention of Shri S. N. Sharma
under M1SA. on the above grounds. The report,
which originated from the Police Station on August 20,
1975 reached the District Magistrate through two
intermediaries on the same day. The d.o. letter ,of
the Chief Secretary addressed to the District Magistrate
desiring detention of Shri S, N. Sharma under MISA
also reached the D.M. on August 20, 1975. Shri
R.. K. Dhawan's instructions to the Chief Minister
were also received on August 20, 1975.

7.260 The proceedings for detention do disclose an
extraordinary expedition in the implementation of
the order received from Delhi through the local chan-
nels. An order intimated by the Additional Private
Secretary of the Prime Minister to the Chief Minister
and communicated by the Chief Minister to the Chief
Secretary was implemented on the same day. Sines,
however, there was evidence before the authorities on
which action under MISA could be taken, the Com-
mission did not find that there was any evidence to
establish that there was misuse of power or abuse of
authority in the arrest and detention of Shri S. N.
Sharma. It may, however, be observed that the
action for arrest and detention of Shri S. N. Sharma
under MISA was directed from Delhi by the Addition-
al Private Secretary speaking on behalf of the Prime
Minister Smt. Gandhi on the 20th of August, 1975,

■ on phone to the Chief Minister. It was communica-
ted to the Chief Secretary on the same day and tlte
official .machinery went into immediate action and the
order was implemented and the arrest and detention
of Shri S. N. Sharma were effected on the very same
day. In coming to the conclusion that there is no
proof of abuse of authority or misuse of power in
the arrest and detention of Shri S. N. Sharma, the
Commission is impressed by the circumstances that
on August 14, 1975, the Joint Secretary in the Ministry
of Home Affairs, New Delhi, had forwarded the name
of certain persons who were active in the Anand Marg
Organisation, which was a banned organisation in the
State of Raiasthan and it was recommended that
efforts should be made . to arrest those persons who
were still at large. The name of Shri S. N. Sharma
was included in the list sent by the Ministry of Home
Affairs.

7.261 Smt. Chandrawati Sharma was an employee
of the Education Department in the Girls School at
Jaipur. Her name was not included in the list of
Anand Margis furnished by the Ministry of Home
Affairs. It appears, however, that the Home Com-
missioner of the State Government of Rajasfhan had

'addressed a d.ol letter to the Inspector General of
Police on August 19, 1975, for his .comments on the
list dated August 14, 1975 received from the Ministry
of Home Affairs. The Inspector General of Police
sent a reply to the Home Commissioner giving prog-
ress report of arrests of activities of. banned organisa-
tions and this report also does not refer to Smt. Sharma.
Action was taken against Smt. Sharma, therefore, not
at the instance of- the Home Commissioner: but only
on the instructions received from the Chief Secretary
by the Joint Director (Women) Jaipur. The instruc-
tions for termination of the services of Smt. Sharma
clearly emanated from the Chief Minister, who had

received, orders,.. in that behalf frpni'. Shri R- K. .
Dhawan. The records of the State Government show
that Smt. Chandrawati Sharma. sought interview with
the Education Commissioner on more than one occa-
sion after the termination of her services and tried to
impress upon him verbally as well as through written
representations that she had been made a victim of
personal animosity between her husband and their
landlord, Shri B. B. Gupta. She also produced a
letter from Shri B. B. Gupta, the landlord, in support
of her contention. The Education Commissioner
brought this matter to the notice of the Chief
Secretary.

7.262 Smt, Chandrawati Sharma has stated before
the Commission that she felt that Kumari Pushpa
Khanna who lived with Professor B. B. Gupta and
was "connected" with him may have had a hand in
complaining against -her at "the' Centre through one
Shri P. N. Katju who also lives in their locality and
who is on visiting terms with Smt. Gandhi. Kumari
Pushpa Khanna is also quite close to Shri P. N, Katju.

7.263 Smt. Chandrawati Sharma has also stated
before the Commission that she had two meetings
with the Chief Minister at which she handed over
representations made by her. She was, however,
told by the Chief Minister that there was nothing
against her in the state and that he had acted only. on
the directions received from Delhi and that if she
desired to obtain any redress she must approach
the authorities in Delhi.

7.264 As observed earlier, the name of Smt,
Chandrawati Sharma did not appear in tlte list of
activists of the Anand Marg sent by the Ministry ' of
Home Affairs to the State Government nor had the
State Government any record with regard to her
activities as an Anand Margi. Smt. Chandrawati
Sharma was an employee in the Education Depart-
ment of the Government of Rajasthan and was ac-
cordingly a public servant. She was entitled to the
protection of Article 311 of the Constitution ' of
India. She could not be dismissed or removed from
service except after an enquiry in which she had heen
informed of the charges against her and given reason-
able opportunity of being heard in respect of those
charges. It is true that enquiry may be dispensed with
in certain exceptional classes of cases falling within
fa), (b) and (c) of the proviso to Article 311 (2) of
the Constitution but no action to dispense with an
enquiry appears to have been taken. This discloses
a clear -case of abuse of authority and misuse of pow-
er contrary to the provisions of the constitution. Smt.
Chandrawati Sharma was entitled to the Constitutional
protection but in defiance of the provision her services
were terminated without holding any inquiry and with-
out dispensing with the. holding of an enquiry as per-
mitted by the Constitutional provisions. The termination
of employment of Smt. Chandrawati Sharma was ex-
facie. unauthorised and carried out onlv on account Af
the directions received by the Chief Minister from Shri
R. K. Dhawan.

7.265 As observed earlier, an inquiry was held
against Shri R. N, Gaur and he was exonerated of any
remissness in the performance of his duties The

intimation was. received, from Shri Dhawan by the
Chief Minister for suspending Shri Gaur immediately.
This intimation was later countermanded by
Shri Dhawan "when Shri Joshi rang back Shri Dhawan
according to the. story of. Shri Harideo Joshi, and it
was suggested that instead of suspending Shri Gaur
immediately an inquiry should be made into the
.conduct Of Shri Gaur, and pursuant to this intimation
Shri Harideo Joshi ..recorded in his note, which has
been set out earlier, that . an enquiry should be
conducted immediately,

.7.266 Shri Mangal- Behari is a member of the
Indian Administrative .- Service. He was formerly
Chairman of the Rajas than State Electricity Board.
He was transferred from that office on the 30th of
June, 1975 to the office of the Revenue Board
at Ajmer and on August 20, 1975 he was directed by
.the Chief Minister, to go on leave. Shri Mangal
Behari made several representations, both to the
Chief Minister and also to the Ministry of Home
Affairs and to the Prime Minister's Secretariat but to
no avail. Ultimately, he was feposted on December
15, 1976- The file in which the recommendation
was made that he should be reposted remained in the
Prime Minister's Secretariat for a period of ten months
between the 3rd of February, 1976 to 8th of
December, 1976; and even when an order was made
for reposting him, Smt. Gandhi made a note on
December 8, 1976 to the. following effect: —

"Yes. But an eye should be kept on him from
tune to timt.

" Sd : Indira Garidhi"..

Accordingly ] the formal decision was communicated
to the State "Government on December 15, 1976 and
.' Shri Mangal Behari was' allowed to resume duty.

" 7.267 According to Shri Mangal Behari, he was
till 1971 a member, of the Anand. Marg, but solely
concerned with the spiritual side of that organisation.
He further stated that he had severed all connections
"vrith that institution, /thereafter, but he had been
victimised because he had declined to make available
the trucks of the Electricity. Board free of charge for
carrying workmen of the Electricity Board to Delhi
to participate in a rally, to be held on June 20, 1975
&t. the Boat Club to/ express, solidarity and support
fo the then Prime Minister, Smt, Indira Gandhi in
the' wake of the Allahabad High Court Judgment.

. 7.268 According to the evidence of Shri Rajendra
Jsiir the" then 'Secretary, RSEB on or about' June 17,
1975 he was called by the then Transport Minister,
Shri Mohan Chhangafti at his residence, who asked him
to arrange for sending 5,000 persons from the State
Electricity Board to the rally being organised in Delhi
m support of the then Prime Minister Smt. Indira
Gandhi, and that the persons who had to go to Delhi
to participate in the rally were to be arranged by the
Electricity Board and . arrangement for their transport
to Delhi arid back had to be made by the Electricity
Board. Shri Rajendra Jain informed the Minister

that it was impossible on the part of the officers of
the Electricity Board to ask the persons working in
the Electricity Board to go to Delhi and also informed
that it was difficult for the Electricity Board to supply
its own trucks for carrying these persons to Delhi.
He was informed that a decision had been taken at
the highest level and that the Chief Minister was in
Delhi and he had deputed the Transport Minister to
organise the rally in Rajasthan and that he was making
these arrangements at the behest of the Chief Minister.
Shri Rajendra Jain has further 'stated that his
Chairman, Shri Mangal Behari had told him that he
"also was being pressurised to arrange the conveyance
to Delhi and back of at least those persons, who were
working in the State Electricity Board.

7.269. Shri Mangal Behari has said in his deposition
that . he had gone and met the Chief Secretary and
told, him : "How can this order be complied with?"
As advised by the Chief Secretary, when he later met
the Chief . Minister, the CM. was "very brief
and very curt" and said that "You do not recognise
Chairman, Shri Mangal Behari had told him that he
CM.. to meet the Power Minister.

7.270 Ultimately it was arranged that a request
Should be made by the General Secretary of the Trade
Union that trucks of Rajasthan State Electricity Board
be made available for enabling the workmen to attend
the General Body meeting of the Workers' Federation
at New Delhi as also to participate in the rally at the
Doat Club on June 20, 1975 in support of Smt. Indira
Garidhi. Accordingly, a request was received in
writing and was passed on to the Chief Engineer with
the instructions by the Chairman on the basis of which
he issued an order placing certain number of trucks
at the disposal of the Union on certain conditions.
This is supported by the evidence of Shri Damodar
Maurya, who stated that on June 16, 1975,
Shri Harideo Joshi, Chief Minister, Rajasthan had
invited him to a meeting of number of persons
including himself at Delhi and had informed that a
grand national rally was going to be organised on
June 20, 1975, in which the State of Rajasthan should
send near about 1 lakh persons and that Shri Harideo
Joshi had assured that every transport arrangement
shall be made through the Government The
arrangement for carrying the employees .of the
Rajasthan Electricity Board was to be made by the
Electricity Board and the employees were to join the
rally— the workmen- being given the special paid leave.

7.271 Before sending the employees to the Tally
at Delhi, a meeting was held at the residence of
Shri Mohan Chhangani, Transport Minister, according
to Shri Maurya,. on June 18, 1975, in which the
Chief Secretary of the Government of Rajasthan,
along with Shri Rajendra Jain, Secretary of the
Rajasthan State Electricity Board were present. The
Transport Minister said at that meeting that the trucks
would be arranged by the Rajasthan State Electricity
Board requesting for supply of trucks for carrying
workers to Delhi to attend the General Body meeting
of the Federation and to participate in the Boat Club
rally at Delhi on June 20, 1975,. . On -receipt of an
intimation from the Rajasthan State Electricity Board
regarding allotment of 58 trucks on payment basis

and. subject to certain conditions lie approached the
then Transport Minister .and refused to comply with
any of the terms set out by the Board, as this was
against the assurance given by the Chief Minister at
DelhL Shri Mohan Chhangani the then Transport
Minister told him that the Board's letter was only a
formality and that no charge will be made from the
Federation or from the "workers who go to attend the
rally at Delhi. Shri Mauryja has stated before the
Commission that it was not possible to call a general
body meeting at such: a short notice nor was it in
fact called as he was told by Shri Mohan Chhangani,
Transport .Minister, that a mention of this was
required only for the purpose of getting the special
;paid leave and the tracks for the workers. Accordingly,
no place for holding the general body meeting was
selected in Delhi nor invitations were sent for the
same. According to the statement of Shri Maury a,
Workers numbering about 5,000 who were taken in
the trucks of the Electricity Board took part in the
rally oh June 20, 1975 ' at Delhi. Those workers
Who had taken part in national rally at Delhi were
given three days' special casual leav& with pay. As
per evidence before the Commission it is seen that
no route permits were obtained from the Rajasthan
Transport Authority as required under the Motor
Vehicles Act for taking the trucks out of the limits of
the Rajasthan State and for the journey to Delhi.

.7.272 Bills in respect of the use of Electricity
'. Board trucks by the workers' union were sent by the
Board to Shri Maurya who stated by his letter dated
April 20, 1977 that the charges of trucks issued by
the Management for workmen to join the rally
organised on June 20, 1975 were ndt payable by the
Trade Union because the arrangement was made by
•the management and the bills should, therefore, be
charged from the Rajasthan State Government.

7.273 Shri. Mangal Behari has, it is true, stated
that he was associated with the Anand Marg some-
time before the year 1971, but he had severed his
connection with that organisation. He further-stated

.that on 19th of June, 1975, he had passed ah order
that the trucks should be made available on payment
of the appropriate charges and after obtaining the

Requisite permits, and since he did not follow the
suggestion made by the Chief Minister, he was
victimised by being first transferred from his office as
the Chairman, which was a very prestigious office to
a comparatively unimportant office and thereafter "he
was asked to go on leave and for a major part of
that period he received no remuneration at all.
This, according to Shri Mangal Behari, was intended
to be a penalty measure taken against him because
he stood up against the unauthorised demand for
utilising the State trucks in support of a party
activity of the Congress Government, to which party

.the Chief Minister belonged.

7.274 The evidence establishes that there was
abuse of authority in directing the termination of
employment of Smt, Chandrawati Sharma ; in
transferring Shri .Mangal Behari from the Chairman-
ship of the Rajasthan State Electricity Board and later
compelling him to proceed on leave, and also m
directing the inquiry against Shri-R. N. Gaur.

7.275 According to the evidence ,of Shri Harideo
Joshi, the original intimation, received from
Shri Dhawan contained a direction that Shri Gaur
should be suspended and that Shri Mangal ; Behari
should be relieved from service. According to
Shri Harideo Joshi, he after consulting his officers
rang up Shri Dhawan again and Shri Dhawan agreed
to only an inquiry being held against Shri R. N. Gaur.
Even though there was a direction to relieve
Shri Mangal Behari of his office, no such action could
immediately be taken by the State Government
according to law because Shri Mangal Behari was an
IAS officer posted to Rajasthan cadre and his
compulsory retirement could only be ordered by the
Central Government in consultation with the State
Government.

7.276 The circumstance that action, as initially
directed by Shri Dhawan was not taken according to
the strict tenor and there was some modification made
in regard to Shri R. N. Gaur and Shri Mangal Behari,
does not, in the view of the Commission, amount to ■
any substantial change. It is still, an abuse of
authority, when pursuant to the directions given by
Shri Dhawan, Shri Harideo Joshi has purported to
hold an inquiry against Shri R, N, Gaur and has
directed Shri Mangal Behari to proceed on leave; and
kept him continuously on leave right till 15th of
December, 1976.

7.277 Shri Harideo Joshi is the person, who gave
the ■ instructions. He has stated before the
Commission that when he handed over the note of
the instructions received from Shri Dhawan and as
recorded by him to his Chief Secretary, he expected
that action would be taken according to law. He
did not intend that action was not to be taken according
to law. But the manner in which the action was
taken, the expedition with which the orders were
carried out in respect of Shri S. N, Sharma,
Smt, Chandrawati, Shri R. N. Gaur and Shri Mangal
Behari clearly indicate that no option was left to the
Chief Secretary, but to carry out the orders, . as
directed. It does not appear to be the understanding
of the Chief Secretary or of the subordinate officials
that they were to regulate the directions of the Chief
Minister according to law and take such action as
was permissible and after satisfying themselves
whether, in law, such action should be taken. In
any event, the action against Smt. Chandrawati
Sharma was wholly unjustified. There was no scope
for action being taken against her by relieving her of
her office as a teacher in the Maharaja's Girls School
without giving her an opportunity, . as provided by
Article 311 of the Constitution. There was no order
from the Governor dispensing with an inquiry oa
any of the grounds provided in the proviso to Article

... 7.278. In these circumstances, it is established that
Shri Harideo Joshi directed his subordinate officials
to carry, out the directions recorded by him as
received from Shri phawap, ",

7.279 Shri Harideo Joshi was served with notice
under Rule 5(2) (a) of the Commissions of Inquiry

Rules and summons under section 8B of the Commis-
sions of Inquiry Act. The Commission has taken into
account his statement as also the evidence led by him.

7.280 Shri Harideo Joshi has taken two different
stands. When it came to Shri Dhawan he took the
line that he acted as he was told to do by Shri Dhawan
which he thought were in fact the orders of the Prime
Minister. In the case of Shri Gaur he had sought
and obtained clearance from Shri Dhawan for not
suspending Shri Gaur. As for Shri Mangal Behari,
he had asked him to proceed on leave even for which
his Chief Secretary had obtained the clearance of
Joint Secretary, Shri P. N. Bahl in the Prime Minis-
ter's Secretariat. Regarding the action taken on the
others, namely Shri and Smt. Sharma, Shri Joshi had
taken the plea that when he marked the papers to the
Chief Secretary "for necessary action", he .intended
that action would be taken by the officers according
to law. Tiie Commission feels that actually action
was taken by the officers as desired by the Chief
Minister and not according to law, Shri Joshi him-
self has mentioned in his statement before the Com-
mission that he felt that he was left with no option
but to carry out the directions as conveyed to him
by, Shri R, K. Dhawan. He cannot escape the
responsibility for what followed both with regard tt>
Smt. S. N. Sharma's termination of services arid
the long period that Shri Mangal Behari had to remain
on leave. During his statement before the Commis-
sion, Shri Harideo Joshi has himself conceded that
a mistake was committed in the case of Smt. Sharma.
Shri Joshi has thus misused his position, subverted
the established administrative procedures and abused
his authority in terminating the service of Smt. Sharma
without observing the Constitutional provisions.

7.281 The next question relates to the involvement
of Shri Dhawan and Smt. Indira Gandhi. According
to Shri Dhawan, he merely read out the CBI report,
which had been received by him from the Prime
Minister and he gave no directions to Shri Harideo
Joshi on telephone. He also denied that Shri Harideo
Joishi again rang him up after a few minutes after
the first telephonic conversation.

7.282 Considering the evidence, the testimony of
Shri Harideo Joshi on this aspect is more reliable.
As according to him he had initially recorded in Hindi
the gist of the order received by him from Shri Dhawan,
which was later recorded in English after discussion
with his officer. Shri .Dhawan- has admitted that he
had-carried out the directions of Smt. Indira Gandhi.
According to him, he was handed over the; CBI report
which was read over to Shri Harideo Joshi by him on
the telephone.

7.283 It appears that some notipgs in the file of
Department of Personnel, Government of India, had
been initiated early in the month of February. 1975
with regard to the involvement of Sjiri Mangal Behari
in the, activities of Anand Marg. 1 A list of Anand
Margis had also been prepared by the Central Govern-
ment and the names of Shri S, N. Sharma and Shri
Mangal Behari were included in the list. If an inti-
mation was received by the Prime Minister with regard
to the CBI inquiry, nothing would have been easier

than. to send a report in writing with regard to the
intimation so received to the concerned Ministry in
the Government of India and to the Chief Minister of
Rajasthan. The steps taken of reading over to the
Chief Minister, the entire report of the CBI on tele-
phone containing a number of details would be unusual.
Jt appears that no record was intended to be kept of
the conversation between Shri Dhawan and the Chief
Minister of Rajasthan and that is why Shri Dhawan
rang up and informed Shri Harideo Joshi about the
action to be taken by the letter against the four per-
sons named in that report. It is purely a twist of
circumstances that Shri Harideo Joshi recorded in the
first instance, having regard to the multiplicity of details
in the action intended to be taken, in Hindi of the
intimation given to him and thereafter made a formal
record of it in English after consultation with his offi-
cials. It is true that the Hindi version Of the intimation
was not maintained but there is no reason to disbelieve
the testimony of Shri Harideo Joshi in that behalf,
especially when the English version substantially con-
tains the recommendations, which are made by the
CBI in regard to the action to be taken against the
four persons concerned and Shri Dhawan says- that
intimation was given on the telephone with regard to
that report.

7.284 The involvement of Smt. Gandhi with regard
to the action taken against Shri and Smt. S. N. Sharma,
Shri R. N. Gaur and Shri Mangal Behari is clearly
established by the testimony of Shri Dhawan as corro-
borated by the testimony of Shri Harideo Joshi and
the various actions, which were taken with very great
despatch on 20th of August, 1975 or soon thereafter.

7.285 When a formal notice was issued tinder rule
5(2) (a) of the Commissions of Inquiry Rules in re-
gard to this matter, Smt. Indira Gandhi declined to file
a statement, as required by the Rules. When the
Commission asked her to enter the witness box and
be examined under section 5(2) and a procedure
analogous to Order X of the Civil Procedure Code,
she declined to take the oath and refused to answer
any question on the plea that she was hot legally and
Constitutionally bound to answer the questions. In
the circumstances, it is open to the Commission to draw
adverse inference against her.

7.286 The .circumsiances # ^jerneh established top
imTnhfgmmt, ars, briefly these ■:—

(i) that she received information that Shri S. N.

Sharma was an Anand Margi and that Anand

? Marg was declared banned organisation; .

(ii) that even though Shri R. N. Gaur was in-
formed about the burning of some records,
he did not reach in time, nor tried to save
the records;

(iii) that Smt. Chandravati Sharma was also an
Anand Margi and she was stilt continuing in
employment as a public servant;

(iv) that Shri Mangal Behari, an IAS officer was
an active Anand Margi; and

(v) the file of Shri Mangal JMiari remained. perid :

-- ing: with the .then: Prime Minister's Secretariat

. from February 3, 1976. to December .8,

1976.. 'There is. no satisfactory explanation

. forthcoming for this inordinate delay.

. . '- , ■ i ...

7.287 In the absence of any explanation forthcera-
ing from Smt. Indira Gandhi and ou the evidence
produced, the Commission is satisfied that she .was
responsible, for (i) causing the termination of services
of Smt. Chandrawati Sharma, Assistant Teacher,
Government of Rajasthan, in violation of the Consti-
tutional provisions; and (U) the prolonged .forced leave
on which 'Shri Mangal Behari had to remain: for about
16 months and for causing the attending -hardships
which ensued as a result thereof . She has ^thus: mis-
used her position, abused her authority and subverted
well-established administrative procedures and lawful
processes. ■

7.288 Shri Dhawan was served with a notice under
rule 5(2) (a) of the Rules and a summons under
section 8B of the Act, He responded to the summons.
Shri Dhawan has taken the line that he merely read
but the CBI report as directetTby flic Prime Minister,
but did not indicate any specific action to be taken
with regard to any of the individuals figuring in the
note recorded by Shri Harideo Joshi. According to
him this should be apparent from the fact that Shri
Gaur was not suspended and Shri Mangal Behari was
also not relieved from service but only sent on leave.
If what he had conveyed to Shri Joshi were to be
treated as orders, there was no reason why the opera-
tional aspects of these orders should have been inter-
fered with, as in fact it was done in the two cases
referred to above. This plea of DhaWan is not tenable
inasmuch as for (he deviation in both the cases,
Shri Joshi and the Chief Secretary had obtained the
clearance from Dhawan in one case and Shri P. N,
Buhl, Joint Secretary in the PM's Secretariat in the
other case for the eventual course adopted. Shri
Dhawan did read out from the CBI note at the ins-
tance of the Prime Minister. The Commission feels
that as in many other cases, Dhawan has been acting
merely on orders and on that account it does not hold
him responsible for the subsequent things that followed.

7.289 The Commission feels concerned about two
important aspects figuring in this case.

.7.290 The first is the manner in which the services
pf Smt. Chandrawati Sharma, who was only an Assis-
tant Teacher, were, terminated without the slightest
fuss or protest and she remained removed from service
till she was reinstated after the change of Government
following the Lok Sabha and the Assembly Elections
. in March 1977. No functionary oflhe Government
put up even as much as a note pointing out that the
political activities alleged against her were not correct
-arid that she was being kept out of service for no valid
and understandable reason. As against this, totally in-
different and callous attitude, the "manner in which the
State Government officials rallied to the support of
Shri Mangal Behari, an IAS officer, is indeed unique
and is in striking contrast to the manner in' which Smt.

Sharma was dealt, with. How are we .going, to ensure
that every employee of the Government regardless ol
their rank and status enjoys full security and. protec-
tion of service? Until this is done, the manner in
jwhich these two functionaries of the Government were
dealt with— one a low-placed Assistant Teacher, and
the other . a high-placed- IAS officer— would . be
considered as ■; ..an unpardonable and invidious
distinction.

■7.291 The .second is with regard, to the file that
was maintained by the Intelligence Bureau against
Shri Mangal Behari. The Commission had access to
the Home Ministry file dealing with Shri Mangal
Behari's activities with regard to Anand Marg. It is
surprising how the various specific activities alleged
against Shri Mangal Behari by the Intelligence Bureau
were systematically demolished by. the Rajasthan State
CJ.D. It is the exonerating and alleviating reports
of the State C.I.D, which enabled eventually the Gov-
ernment to take a lenient view of Mangal Behari. and
to allow him to continue in' service... lu the lace of
the consistent reports in favour; of ^Shri Mangal Behari
by -the Rajasthan State C.I.D., even the Intelligence
Bureau eventually, veered round to the point of. view
.'which is evident 'from the report of the Director, Intel-
ligence Bureau himself which runs as follows :—

"The activities of . Shri Mangal Behari, as are
known to us, remained, confined to the spiri-
tual and organisational fields of the Anand
Marg. It is quite likely that Shri Behari was
taken in by ; the spiritual pretentions of the
Anand ' ' Marg without realising its true
characters'."

7. 292. If one had to go Only by the initial Intelli-
gence Bureau reports; it would have been difficult for
Mangal Behari to have continued in service, as all
the reports 1 of the Intelligence Bureau, were extremely
damaging to Shri Mangal Behari. It was fortunate
for. him that the reports of his State C.I.D. were more
factual than those, of' reports- of the IB.

7.293 la this case, if the Department of Personnel
of the Government Of India did not have the benefit
of -the scrutiny of the IB reports by the reports obtain-
ed from the Rajasthan State Cl-D., it is quite likely
that the Department going by. the IB report alone
cculd have come to certain conclusions which may not
have been' altogether helpful to Shri Mangal. Behari.
May be, this is one of the few cases where the IB
report may not have been in complete conformity with
all the facts. In this connection, the Commission
would invite the. attention of the Government to the
report initiated by the IB on Justice R. N. Aggarwal
and which came to.be used by -the Government to the
detriment of Justice Aggarwal. As it transpired, the
IB report on Justice R. N. Aggarwal was also not
correct in certain material particulars; Considering,
therefore,, the risks, involved and the damage that an
adverse IB report can cause to an individual, both
in terms of his reputation as, also of his career pros-
pects, the Commission' recommends that the Govern-
ment should take steps to ensure that every IB report

on' the activities and material' particulars of individual
is correct. 1

19. Irregularities in initiating action resulting in
search and seizure operations under the Income
tax Act. in the case of two trade union leaders.

.7.294 Sometime early in August . 1975, Shri
Harihar Lai met Shri D. Sen in the letter's office on
Shri Sen's request. It would appear' that Shri Sen
passed on to Shri Harihar Lai certain information
relating to one Shri Prabhat Kar who was at the
relevant time the General Secretary of the All India
Bank Employees Association and Shri D. P. Chadha
who was the President of' the same Association.
Information in relation to Shri Prabhat Kar was that —

(1) he received a remuneration of Rs. 2,000
p.m. ;

(2) he stayed 'in a house rent of which was
borne by the Association ;

(3) the Association provided him with a motor
vehicle ;

(4) in 1973 he received gifts totalling, up to
Rs. one lakh at the time of his daughter's
marriage ; and that part of the amount had
been invested and deposited in Bank
account ;

(5) he was receiving various other pecuniary
benefits and had amassed wealth much be-
yond his known sources of income ; and

(6) lastly, he had a standard of livinjr much
above that warranted by his known sources
of income.

7.295 In the case of Shri D. P. Chadha, the in-
formation was that —

(1) he was drawing a salary over Rs. 2,000
p.m.;

(2) he had purchased a flat in Punjab National
Bank Housing Society near Lallubhai Park
at Andheri in Bombay ; and that

(3) he may not be an income tax assessee.

7.296 In the case of Shri Prabhat Kar, Shri Harihar
Lai made certain enquiries and found out that
he was not being assessed to income tax and that it
was ntot known in which Commissioner's jurisdiction
he was assessable. Shri Harihar Lai, therefore, autho-
rised search operations in the case ,of Shri Prabhat
Kar u/s 132 of the Income Tax Act. In the case
of Shri D. P. Chadha, Shri Harihar Lai passed on
the information received by him to Shri O. V.
Kuruvilla, the then Commissioner of Income Tax,
Bombay City-1. On the basis of the information
referred to above in this case, Shri G. V. Kuruvilla
authorised search operations u/s 132 of the Income
Tax Act in the case of Shri D. P. Chadha at Bombay.

•7.297 -Search operations in both these cases- were
carried out on" the 13th August,- 1975. -While Shri
Prabhat Kar had not been filing returns of income in
regard to the remuneration received by him from the
Alt' India Bank Employees Association, it was seen
that Shri D. P. Chadha was filing returns of income
regularly and that all his assets were properly
explained.

7.298 In the course of his testimony before the
Commission, Shri D. Sen, the then Director of the
C.B.I., stated that certain information in regard to.
S/Shri Prabhat Kar and D. P. Chadha, which he had
recorded in a note dated 21-7-75, was furnished to
him by Shri R. K. Dhawan, who had gone to Shri
D. Sen's office, Shri Sen added that he had passed
on the information to the Ofncer-in-Charge of the
Intelligence Unit for verification and that as recom-
mended by his Joint Director, he had passed on the
information collected to Shri Harihar Lai.

7.299 In his written statement in response to the
notice under Rule 5(2) (a) of the Commissions of
Inquiry (Central) Rules, 1972, Shri Sen has stated
that the information that S/Shri Prabhat Kar and
D. P. Chadha were office bearers in various Bank
Unions and that they extorted moaey for donations
to various Union funds from the clients of the Banks
and that they misused Unio'n funds and were living
in good style was received by him oh or before
21-7-1975 from Shri R. K. Dhawan of the PM's
Secretariat and, Shri Om Mehta who was then the
Minister of State in the Department of Personnel.
He has added that at that stage he did not know
whether S/Shri Prabhat Kar and D. P. Chadha were
or were not public servants.

7.300 S/Shri R. K. Dhawan and D. Sen had also
appeared in response to summons u/s 8B of the
Commissions of Inquiry Act, 1952. They had also
availed of the opportunity to make their submissions
on the evidence adduced before the Commission. At
both these stages, Shri R. K. Dhawan denied having
given any such information to Shri D. Sen. In res-
ponse to .a query from Shri D, Sen, Shri Dhawan
confirmed ' that he had been giving information of
similar "nature to Shri D. Sen on certain other occa-
sions but denied that he had given any information
in this case.

7.301 In the course of his testimony Shri Harihar
Lai referred to the information as supplied by" Shri
D. Sen and said that when the information was cop-
ing from a. source as important and responsible as
the Central Bureau of Investigation, he believed that
there was case for authorising search^operations in
the case of Shri Prabhat Kar. In the case of Shri
D. P. Chadha, he had merely passed on the informa-
tion to the concerned Commissioner of Income Tax
at Bombay for necessary action.

7.302 After completion of the search operations,
Shri D. Sen had recorded a secret note dated August
16, 1975, wherein he, stated that, he had given

information as indicated in the nofe to Shri Harihar Lai
about S/Stiri Prabhat Kar and D. P. Chadha and
that on the basis of that information the houses of
S/Shri Prabhat Kar and D. P. Chadha were "got
searched" by Shri Harihar Lai. The note further
adds — "a copy of his (Shri Harihar Lai's) report
giving result of these searches is enclosed." It is not
clear to whom Shri Sen had addressed this note, In
his oral testimony before the Commission, Shri D.
Sen has stated that he could not recollect to- whom

the report was sent. He, however, mentioned that
he might have sent it to Shri Om Mehta or to Shri
R. K. Dhawah.

7.303 While the 'circumstances leading up to the
search and seizure operations in these two cases no
doubt appear to be somewhat unusual especially Shri
D, Sen's role therein, no subversion of administrative
procedure or misuse or abuse of power has been
clearly established.

MGIPRRND— S/39 HA/77—TSS 11—18-3-78—2400.

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th* dlstriot aomihistretioh haaWpealed to tlie people

to extend their cooperation in maJnValntny peace end . oM&r
md help in conducting peaceful pot A §♦ people nave been
otitioned against runjours *«0 janti-ioclal element;*.
tfffl^amedtarld^PP-png hem ZiO'Jn ra a iy/->

£M " ON L Y r^

*PPtt6*aU>JuJ £i pit iftmr V -^

frtr«tf>

\fj3ffALI0R. t FEB ?1{ 5A^ACMAR)THE ^ANATA PARTY LEADER.MR " *3HCf,r^HTA j

7 -ANtKsAID THAT THtnE AHOULD BE NO NO CONCENTRATION Or ECONOMIC AND
POLITICAL POV/EftjS IN ONE HAND OR gnrttWtitoLHJ AT THE CENTRE BUT it
SHOULD BE DlStRlBUTED TO THE £ Mgj^ T^^QRN£)p)F THE COUNTRY.

. .^R^^HTfc^S-^mS-eVE^fK^ADDRESStNfi THE FIRST jPU&ilC't^ET.lNO OF
JANATA PARTY MT GWAL I OR./ ^Mrt** 1 ***^ j 7K/L /-.uUjtfCK'S'W

•-■-"^QEysgttiEHre'faE ft l i t P F R O ^rP AT rALA ^ n SgO^'TJOT'TiOnBE

i?^<jTL:

t . it

:revER.

Ht-iemHG.AS.SHE-HAD

tiSMHWERATURE BUT ADDRESSED

fcfcft^y

M nx ! « m *ft x w*a -

EARI/IER HE ADDRESSED PUBLIC MEETINGS |ff~BH I NO AND MORENA

WRLIAMENTARY CONSTITUENCIES* >T ^-«> - *^"' ^^/^

"^Wl/MCHTA ACCUSED I HE (JUNG H tSS f ' O ft: AMENDING THE CQNSTiniT^^-|^ :
.ETH£iiT£_SHmA.D REMAIN WITH THE PEOPLE AND Tnc KESP^NSlLlTiES 0tf\3$

G0VEIWteNT7wHY~TTR^ SHOULD NOT NOT j£--tiADE RESPONSIBLE

EVER AFTER OF HIS OR HER OFFlcT>01^f^^e<lN GOVERNMENT ?

AMENDMENT MADE TO THIS EFFECT IN-THCOJOttim^ AND

IT WOULD SU I TABlV VzzAMENDSo' ll'

HE JANATA PARTY COME TO

„ 'in i " — ~- '

/RGD QQOCHRS 23/2

1JL

ED /DELH I PLA CK ACK BPL NO NO UPTO FOUR TKS BPLRGO
ANOBPL Ut^TO CIGHTEF.N TKS

Just mrw vwi ^tksbpu«3d T^^^rs; 3 tks

Attn Desk

Any story from Raipur on the alleged assault of some persons
should be referred to Mr WL before use,

GV/ 19.3.77 0610

SVi

urgent

for deLhi. onl y
tpL no no tw
attack two Last raipur

,'rar kaushik toLd newsr.an that some /er sobs attacked them With
lathis vhen they along with some other workers were on round of
tie station area.." / ^ "

he said tie ms hit with- Lath. is • firsts and kicks and his
forta was 'torn off. mr rnu-kerjei was hit by 3 knife which, caused
juries on- his chin, and he-^was removed to hospital.- another cpi
Leader mr ram sahay tivarV'and some other jar.at* party, workers were
sLso injured* he added. / -

' villi* mr kaushik descrioed it a -rpotlticaL attack-:-, conoress
cirrctas said that it/was a stage managed shave with an object to
"feike political advantage on election eve.

conoress appealed to the people not not bio be misguided by
rumours spread by' anti-social elements.

heavy police yferrang: em en ts have been made in the town and .

police petrolling in ten si.via.d. samachar
corr pr.g kan /2035 hrs 1S/S .«-■--

PHP. 310
2400

PRINTED BV THE MANAGER, GOVT. OF INDIA PRESS, RING ROAD, NEW DELKI-1 10064
AUD PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DEtHt-1 10054, 1978

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Full text of "137896426 Shah Commission Of Inquiry Interim Report I"

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